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New York Public Service Commission Chair Warns of Rush to Judgement on Connection Between August Blackout and Competitive Markets

In his remarks at the Oct. 20 technical conference on the Federal Energy Regulatory Commission’s (FERC) proposed Standard Market Design, New York State Public Service Commission Chairman William Flynn sought to put to rest the almost reflexive assertions by some that the spread of competition in electricity markets was a major cause of the Aug. 14 blackout.

“A lot has been said and written about that event, and I think in the rush to reach conclusions there has been some misinformation and speculation that may have been reported as if it were fact,” he warned.

“I would like to address some of the misinformation out there by discussing briefly what kinds of policy or regulatory changes I don’t see coming out of this blackout in New York State,” Flynn said. “First, I don’t see the state turning away from energy industry restructuring.”

“This blackout didn’t distinguish between regulated or deregulated states…. For some, deregulation may be a convenient explanation for the blackout, but the facts as we know them simply do not support that conclusion,” he said.

“Re-regulation is not the answer,” he continued. “Restructuring in New York State remains an evolving process and as problems and issues are identified that hinder markets, we will continue to develop market-based solutions and adjustments to enable competition and promote greater choice.”

Flynn also addressed concerns that “deregulation” exacerbated the decline in capital investments in the transmission and distribution systems in New York.

“I will not argue that no additional investment in the transmission system is needed in the post blackout era, but to blame ‘deregulation’ for the decline in transmission investments is simply unfounded,” he said.

“In fact, our pro-competitive restructuring policies are attracting significant interest in transmission investments where they are most needed, including the Cross-Sound Cable, the Cross-Hudson Cable and the proposed HVDC cable from Albany to New York,” he noted.

For more information or a copy of Chairman Flynn’s remarks, contact EPSA’s Douglas Austin at daustin@epsa.org, or call (202) 628-8200.