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New York State Public Service Commission letter to Federal Energy Regulatory Commission

New York State Public Service Commission letter to Federal Energy Regulatory Commission

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New York State Public Service Commission letter to Federal Energy Regulatory Commission
New York State Public Service Commission letter to Federal Energy Regulatory Commission

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Published by: ttapm777 on Mar 11, 2014
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04/22/2014

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STATE OF NEW YORK DEPARTMENT OF PUBLIC SERVICE

THREE EMPIRE STATE PLAZA, ALBANY, NY 12223-1350
www.dps.ny.gov PUBLIC SERVICE COMMISSION AUDREY ZIBELMAN Chair PATRICIA L. ACAMPORA GARRY A. BROWN GREGG C. SAYRE DIANE X. BURMAN Commissioners KIMBERLY A. HARRIMAN Acting General Counsel KATHLEEN H. BURGESS Secretary

February 20, 2014

Sent Electronically Acting Chair Cheryl A. LaFleur Federal Energy Regulatory Commission 888 First Street, NW Washington, DC 20426 Dear Acting Chair LaFleur, As Chair of the New York State Public Service Commission (NYPSC), I am writing to request the Federal Energy Regulatory Commission’s (FERC) assistance in reviewing the recent increases in wholesale natural gas prices, which have had a significant impact on end-use consumers’ electric prices in New York State. As you are aware, the extreme and prolonged cold weather this winter has put a significant strain on the electric system across New York and in other parts of the country. This weather was accompanied by a high demand for natural gas and a dramatic increase in natural gas city gate prices. The NYPSC has been working closely with the New York Independent System Operator, Inc. (NYISO) to ensure the continued availability of adequate fuel supplies to generation units within New York. While the NYISO has informed me that New York’s generating plant owners and operators have cooperated with the NYISO’s efforts to ensure that adequate fuel inventories remain available to reliably meet demand, the resulting impact on end-users’ electric prices raises significant concerns. Therefore, I request that FERC undertake a review of the natural gas markets during these recent weather events. It is my understanding that the NYISO also intends to request such a review, which I fully support.

From the NYPSC’s perspective, FERC should undertake a comparison of actual daily metered throughput on the pipelines serving the Northeast with the contracted capacity. This will ensure that pipeline capacity is being fully utilized. In addition, a comparison should be made of the prices charged on the “grey market” for pipeline capacity bundled with commodity to regional city gate delivered prices. This comparison would indicate whether any market power concerns exist. I encourage FERC to coordinate this review with any other federal agencies responsible for overseeing the natural gas markets. Such a review will ensure the wholesale gas markets are operating in a competitive manner, subject to the necessary regulatory oversight. The NYPSC is available to assist FERC in this urgent matter. Sincerely,

Audrey Zibelman Chair

cc: Commissioner Philip D. Moeller Commissioner John R. Norris Commissioner Tony Clark Norman C. Bay, Director, Office of Enforcement Michael C. McLaughlin, Director, Office of Energy Market Regulation Jignasa P. Gadani, Director, Division of Electric Power Regulation-East

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