Fortnightly
New York Reviews QF Backup Service
January 15, 1995By Phillip S. Cross
The New York Public Service Commission (PSC) has turned down a request to create a special rate for backup service to qualifying facilities (QFs) with dispatchable contracts. The PSC made the ruling while reviewing a request by Niagara Mohawk Power Corp. for permission to increase its rates for backup services provided to customers with onsite generation, primarily QFs. The utility had withdrawn the proposed rates, but only after the parties to the case claimed that the rate proposal was designed to kill competition, especially from smaller QF projects. The PSC went on to resolve complaints about the operation of the utility's existing backup, maintenance, and supplemental service tariffs under current market conditions.
The PSC found that excess energy supplies often had reduced the market price for energy below the QF's prices, causing Niagara Mohawk frequently to schedule the facilities off line. Under existing tariff rules, QF customers cannot qualify for lower-cost backup power unless they run their own units 90 percent of the time. The PSC said that exempting all dispatchable QFs from the 10-percent load factor rule would be unfair to other ratepayers because a QF facility that is frequently off line for whatever reason imposes additional costs on the system. Therefore, the PSC found the higher-cost rate for supplemental service more appropriate. Re Niagara Mohawk Power Corp., Case No. 93-E-0958, Oct. 6, 1994 (N.Y.P.S.C.).
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