FTC Staff Advises New York State Public Service Commission On Improving Proposal to Transform Electric Distribution System

The Federal Trade Commission staff submitted a comment in the New York State Public Service Commission’s (NY PSC’s) Reforming the Energy Vision (REV) proceeding regarding that agency’s “Staff White Paper on Ratemaking and Utility Business Models” (Revenues White Paper). The REV proceeding seeks, among other things, to restructure New York State’s electricity distribution system in the face of a number of key developments, such as technical advances in distributed energy resources (DERs), increased concerns about the environmental effects of power generation, and consumers’ interest in customized electricity services.

The FTC staff comment, submitted in reply to comments that other parties filed concerning the Revenues White Paper, addresses the NY PSC staff’s views on how to blunt electric distribution utilities’ incentives to discriminate against independently owned and operated DER projects.

The FTC staff comment suggests that the Revenues White Paper, which describes the REV’s objectives only in terms of lower prices or lower power bills, should also focus on improvements to electric system efficiency and on increases in the value that customers derive from customized electricity services. The comment encourages the NY PSC to consider concerns about potential cross-subsidization by distribution utilities and unfair competition in services that independent firms provide to DER investors, owners, and organizers. It also suggests adjustments to some of the distribution utilities’ financial incentives in order to improve customer benefits and avoid harm to competition and efficiency.

The Commission vote authorizing the staff comment was 4-0. (FTC File No. V140012; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of the General Counsel, 202-326-2702.)