TransCanada has filed papers with the Federal Energy Regulatory Commission demanding that its controversial planned 12 percent rate hike for power generators go into effect before June 28, but state Sen. Michael Gianaris (D-Astoria) has introduced legislation to make sure city customers do not have to bear the burden.
The Canadian energy company, owner of the Ravenswood power plant in Astoria, requested Friday that FERC hold a rehearing on the pending hike. TransCanada alleges the hike, which is currently suspended due to controversy, cannot remain past June 28. The company said if FERC does not approve the hike before that time, the rates should be replaced by different ones recommended by the New York Independent System Operator Inc.
“The relief requested here is necessary to avoid harm to the marketplace,” said Washington, D.C., attorney Kenneth Wiseman for TransCanada in the papers.
The rate hikes, estimated to increase electric bills by 12 percent for city residents and 17.5 percent for businesses, have been blasted by Queens elected officials.
U.S. Sen. Charles Schumer (D-N.Y.) asked earlier this month for FERC’s chairman, Jon Wellinghoff, to reconsider the rate, saying the decision did not take into account the numerous tax breaks given to power generating plants. Mayor Michael Bloomberg has also written to Wellinghoff.
“FERC’s decision provides a windfall profit for power generators, giving them additional revenue in the form of hikes to local ratepayers, while at the same time receiving significant tax breaks from New York City,” Schumer said in a statement.
State Sen. Michael Gianaris (D-Astoria) said in a statement FERC planned the hike because it believed power generators need another $500 million a year to make up for the city’s high rate of property taxes.
In actuality, power generating companies that operate during times of peak electric demand receive from the city Industrial Development Agency a 100 percent property tax abatement, a 12-year sales tax holiday and a mortgage recording tax holiday, Schumer’s office said. FERC will hold a rehearing to examine this information. The rehearing has not been scheduled, but Schumer hopes it will be put on the calendar in the next few weeks.
In case the rate hike is not changed, Gianaris has also introduced legislation that would eliminate the power companies’ property tax exemptions and abatements.
“Hopefully, we won’t need to move this bill. The ideal situation is for FERC to reverse themselves,” Gianaris said.
Gianaris’ district includes TransCanada’s plant in Ravenswood, as well as the ConEdison complex, which has power generators run by NRG and USPowergen.
The planned rate hike also came under fire by utility Con Edison, which supplies power but does not generate it.
“This decision is particularly disappointing because it comes at a time when we are redoubling our efforts to keep costs low for our customers,” Con Ed said in a statement.
Reach reporter Rebecca Henely by e-mail at rhenely@cn
©2011 Community News Group
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