July (pdf) - New York Power Authority

esponsibility for purchasing energy to increase their purchases of energy generated from the following
renewable energy technologies: wind, solar thermal, photovoltaics, sustainably managed biomass, tidal,
geothermal, methane waste and fuel cells. State agencies and other affected entities must seek to purchase
sufficient quantities of energy (or renewable energy attributes) from these technologies so that 10 percent of
the overall annual electric energy requirements of buildings owned, leased or operated by such entities was
met through these technologies by 2005, increasing to 20 percent by 2010. No agency or affected entity is
exempt from these goals except pursuant to criteria developed by the New York State Energy Research and
Development Authority. For the purposes of the Executive Order, ‘‘State agencies and affected entities’’
means agencies and departments over which the Governor has Executive authority and all public benefit
corporations and public authorities the heads of which are appointed by the Governor. Regarding those
Authority governmental customers falling within the scope of the Executive Order, the Authority has
offered to provide such renewable energy attributes, and is providing them, to several such customers with
full costs being recovered by the Authority.
CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY
The Electric Utility Industry Generally
Energy Policy Act of 1992
The Energy Policy Act of 1992 made fundamental changes in the federal regulation of the electric
utility industry, particularly in the area of transmission access. The purpose of these changes, in part, was to
bring about increased competition in the wholesale electric power supply market. These changes have
increased competition in the electric utility industry.
Federal Initiatives under the Energy Policy Act of 1992
On April 24, 1996, FERC issued a Final Rule (‘‘Order No. 888’’) significantly changing the regulation of
transmission service performed by electric utilities subject to FERC’s jurisdiction under sections 205 and
206 of the FPA. Among other things, FERC ordered pro forma, open-access, non-discriminatory transmission
tariffs be placed into effect for all jurisdictional utilities on or before July 9, 1996. The goal of Order No.
888, according to FERC, was to remove impediments to competition in the wholesale bulk power
marketplace and to bring more efficient lower cost power to the nation’s electricity consumers by denying to a
generator of electric energy any unfair advantage over its competitors that exists by virtue of its ownership
of its transmission system.
Although the Authority was not subject to FERC’s jurisdiction under sections 205 and 206 of the FPA at
the time Order No. 888 was issued, Order No. 888 nevertheless has had a significant effect on the
Authority and was the impetus to the Authority participating in the formation of the NYISO (see ‘‘PART
2—NEW YORK INDEPENDENT SYSTEM OPERATOR’’). In Order No. 888, FERC stated that it
intended to apply the principles set forth in Order No. 888 to the maximum extent to consumer-owned
and other non-jurisdictional utilities, both in deciding cases brought under sections 211 and 212 of the FPA
and by requiring such utilities to agree to provide open access transmission service as a condition to
securing transmission service from jurisdictional investor-owned utilities under open access tariffs (see
‘‘Energy Policy Act of 2005’’ below).
Energy Policy Act of 2005
The ‘‘Energy Policy Act of 2005’’ (the ‘‘Energy Policy Act’’), among other things: (a) authorizes FERC
to require ‘‘unregulated transmitting utilities’’ that formerly were exempt from regulation under sections
205 and 206 of the FPA (including the Authority) to provide open access to their transmission systems and to
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