In New York, electricity is bought and sold in a wholesale market. Like other markets, it has rules to prevent participants from gaming the system to their own advantage, thus harming their competitors and consumers. But renewable-power producers in the state want to be exempt from those pesky rules — because, after all, they’re green.
So, they asked the Federal Energy Regulatory Commission, which is tasked with ensuring the New York electricity market is fair and competitive, for the electric equivalent of a papal indulgence.
FERC responded with the legal equivalent of a Bronx cheer, ruling that, yes, renewable-power producers have to follow the same rules as everyone else.
FERC’s ruling incensed Sen. Chuck Schumer, who accused FERC of putting its “thumb on the scale in favor of the most polluting sources of energy” and undermining the state’s efforts to combat the “climate crisis.” The senator’s outrage far outstrips his understanding of basic economics — at least, basic economics beyond that of hoovering up campaign contributions.
In fact, contra the senator, FERC’s ruling will help protect New York’s already beleaguered electric consumers, who pay some of the highest rates in the nation. Nor is FERC putting its thumb on the scale to protect those icky, dirty generators. Oil-fired plants and the one remaining coal plant in the state provide less than 2 percent of electricity, mostly when electricity demand is highest.
Jonathan A. Lesser, PhD, is the president of Continental Economics, an economic consulting firm, and an adjunct fellow with the Manhattan Institute. His most recent report, “Is There a Future for Nuclear Power in the United States?” was published in July 2019.
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