Electricity prices in New York are escalating in comparison to prices nationwide in fact, the average electric rate in New York is 50 percent higher than the national average.

This poses a serious problem for our consumers and businesses. High electric rates have a negative impact on job retention and growth especially in the manufacturing sector. Often, the cost of electricity plays an important role in where these businesses will locate and whether they will expand.

A variety of factors, including higher capital costs, purchased power costs, and taxes, are responsible for the difference between New Yorks electricity rates and those in other states.

The electric industry is heavily regulated at both the state and federal levels. In addition to investor-owned utilities, the industry in New York includes independent power producers, the Power Authority of the State of New York, municipal electric systems, rural electric cooperatives, and energy service companies.

 Competition is Key

Introducing competition into the electric industry is one of the most promising options available for reducing costs. Various models of wholesale and retail competition are under consideration. In fact, the State has already implemented a limited form of wholesale competition; however, existing utility investments and independent power contracts are not subject to the rigors of a competitive generation market. Retail competition promises even further cost reductions by allowing customers to choose among a variety of electricity suppliers, producing not only lower prices, but also a greater variety in the types of service available.

 Some Risks Are Involved

Any proposal for competition must be analyzed with the risks in mind. Competition could result in cost-shifting among customer classes, to the detriment of residential customers and small businesses. Utilities and independent power producers investing money in existing plants could find their investments stranded. Disruption of the industry could have an inequitable effect on some workers. Competition, if not carefully structured, could also have adverse impacts on the safety and reliability of the electric system. Many of the social benefits provided through utilities, such as universal access and energy efficiency services, could be jeopardized.

New Yorkers electricity costs are among the highest in the nation yet they vary substantialy across the state. This section demonstrates how trends in electricity prices and rates continue to erode New Yorks competitive position,even though New Yorks electric prices are more in line with the Northeast than they are with the country as a whole.

Figure 1, based on the most recent comparative data available from the U.S. Department of Energy, shows that from 1987 through 1991,the average price for electricity in New York, New Jersey, and Pennsylvania increased faster than the national average. In 1990, New Yorks average rate surpassed that of New Jersey. In 1992, the average electric rate charged by New Yorks utilities was 50 percent higher than the average rate nationwide, nine percent higher than the 1987 differential of 31 percent.

The trend of increasing electricity prices in New York appears to be growing. Between 1988 and 1992, real electric prices, that is prices adjusted for inflation, decreased by 7 percent nationwide while increasing by 2 percent in New York. By 1992, the average nominal price per kilowatt-hour in New York was 10.92 cents compared to 7.06 cents nationwide.

Between 1992 and 1994, average rates increased for all the states utilities, although the extent of the rate increases varied widely. The average bill for residential customers in the state grew from $764 to $854 with no significant change in usage levels.

Table 1 provides additional evidence of the high costs of electricity in New York State. New York City has higher electricity costs than most other major cities across the country. Electricity costs are a function of both the electric rate and usage. For example, while the rate per kilowatt hour in Philadelphia is higher than New York City for home use, most of the annual cost differential results from typically higher usage of electricity in Philadelphia.

As illustrated below in Figure 2, New York State Electric Prices by Utility (1980 - 1993),the utilities in New York State with the highest average nominal electric prices operate downstate. During the period from 1980 to 1993, electricity prices for the Long Island Lighting Company (LILCO), Consolidated Edison of New York (ConEdison), and Orange & Rockland (O&R) were generally above the average electric prices in New York. For the same period, New York State Electric and Gas (NYSEG), Rochester Gas & Electric (RG&E), Niagara Mohawk Power Corporation (NIMO) and Central Hudson (Cen. Hud.) were generally below the New York average electric price.

Although the average nominal price charged by each electric utility company has increased over the 13 year period, their rates of increase have been different. During the period between 1980 and 1993, the average state electric price rose 67 percent. LILCO, NYSEG, NIMO, and RG&E prices increased by more than 67 percent. For the period between 1988 and 1993, the states average electric price rose 26 percent and LILCO and NIMO had larger increases.

The prices of electricity, as well as the safety and reliability of the electric system, are subject to regulation at the state and federal levels. Although the industry is dominated by the states seven investor-owned utilities, there are a number of other significant participants in the industry including independent power producers (IPPs) and the Power Authority of the State of New York (PASNY). This section provides general background on the industry.

A. Investor-owned Utilities

New York has seven investor-owned utilities providing electricity to consumers. These utilities, ranked by size, are Consolidated Edison Company of New York, Inc., Niagara Mohawk Power Corporation, Long Island Lighting Company, New York State Electric & Gas Corporation, Rochester Gas and Electric Corporation, Central Hudson Gas and Electric Corporation, and Orange and Rockland Utilities, Inc.

These utilities serve over 7.2 million electric customers, with total electric revenues exceeding $14.2 billion annually. Each year the utilities sell, or transmit for sale by the Power Authority, nearly 150 billion kilowatt-hours throughout the state. (A kilowatt-hour is the amount of energy required to run a 100-watt light bulb for ten hours.) At peak hours, total statewide demand exceeds 27,000 megawatts. In order to meet this demand, and also to be prepared for unexpected contingencies, utilities must maintain over 32,000 megawatts of generating capacity. (A very large power plant such as a nuclear plant would represent approximately 1,000 megawatts.) Currently, the states utilities own and operate over 160 generating units. Table 2 provides some basic information for each of these utilities.

¹Individual utility peaks cannot be aggregated because they occur on different days. The peak demand for the entire New York Power Pool in 1994 was 27,062 Mw.

Source: 1994 Annual Report filed with the New York PSC; New York Power Pool; Load and Capacity Data, 1995.

In terms of energy or kwh sold, Niagara Mohawk is the state's largest utility with Con Edison the largest in terms of revenues. Con Edison also has the largest peak demand, that is , the greatest amount of electric power demanded simultaneously by all customers of a utility.

The reliability and efficiency of this system's operation is assisted by the efforts of the New York Power Pool. The Power Pool coordinates power flows across the system of generating plants and transmission lines ensuring adequate power to meet all customer demands.

For most of this century, regulation of electric utilities has followed a predictable set of rules under rate of return regulation. A utility:

• is obligated to provide power on demand to any customer in its service territory;
• enjoys a monopoly over retail service within its territory; and,
• is entitled to recover the costs of providing electric service, to the extent that those costs were prudently incurred.

A utilitys cost of providing electric service includes the cost of fuel, labor, capital investments in equipment, a return to investors, purchased power, and taxes. After calculating the cost of providing electric service, including the allowable return to investors, regulators determine the rate structure, i.e., the manner in which the various classes of customers will pay for the cost of service. Typically, industrial rates are lower than commercial or residential rates because of economic advantages of serving a large customer.

Most of these regulatory activities are performed at the state level by the Public Service Commission. The Federal Government has jurisdiction over wholesale transactions among utilities, while states have jurisdiction over retail transactions between utilities and their customers.

Over the past 15 years, major changes affecting the regulatory environment have swept through the electric industry:

• Utilities no longer have exclusive control over the generation of power. State and federal laws require utilities to purchase power from certain types of independent power producers. State law requires utilities to consider all reasonably available sources of power before investing in their own facilities, and the Public Service Commission requires utilities to conduct competitive bidding for new generating capacity.

• Since 1992, under the National Energy Policy Act of 1992 (EPACT), utilities must transmit or wheel the power of other generators. Utilities must now make their transmission lines available to outside generators for purposes of wholesale transactions.

• Not only have utilities lost their monopoly over power generation, but the monopoly over retail sales is also threatened. Independent power producers may sell power directly to industrial customers adjacent to their facilities. Also, EPACT appears to grant states the authority to order utilities to wheel electricity for retail purposes. In 1994, sources other than New Yorks utilities were responsible for 5% of retail sales.

B. Ratemaking Process Changing

In New York, the traditional ratemaking process has also undergone considerable change. Annual rate cases are frequently replaced by multi-year settlements. The traditional cost of service formula has been modified by the introduction of performance incentives and revenue decoupling mechanisms. Performance incentives not only allow utilities to earn extra profits for improved customer service, but also penalize them if they fail to meet quality of service goals. Revenue decoupling mechanisms have separated utility profits from the volume of electricity sold; this promotes energy efficiency by reducing the utilitys incentive to sell more power.

Utilities may also offer negotiated rates to businesses in order to retain them as customers. Businesses with competitive options for electricity supply, such as self-generation, or businesses at risk of closing their operations in New York, may be eligible to receive lower rates.

C. Independent Power Producers

Independent power producers (IPPs) are private companies selling power to utilities; the utilities then resell the power to consumers. IPPs supply approximately 20 percent of the states electricity, and many also sell steam to neighboring industrial and institutional facilities.

Federal and state laws enacted in the late 1970s and early 1980s require utilities to purchase power from IPPs. The purpose of these laws is to foster competition, reduce reliance on imported oil, and boost employment at industrial facilities that are the thermal hosts for independent power plants.

IPP rates are not subject to cost of service regulation by the state because, with certain exceptions, IPPs do not sell directly to retail customers. IPPs contract with utilities for the sale of the power they produce. The federal government has jurisdiction over these wholesale contracts. The federal government has, however, delegated to the states the authority to establish the price forecasts, forming the basis for many IPP contracts.

D. The Power Authority of the State of New York

The Power Authority of the State of New York (PASNY) supplies approximately 25 percent of the states electricity. Annual revenues from PASNYs generating facilities exceed $1.3 billion. As well as selling to utilities for resale, PASNY sells directly to municipal electric systems, rural cooperatives, certain municipal entities, and certain industrial customers.

More than two-thirds of the power generated by PASNY is hydropower from the St. Lawrence-Franklin D. Roosevelt Power Project and from the Niagara Power Project. PASNY also owns and operates two nuclear power plants, one large gas/oil fired generating station, a 1000 megawatt pumped storage facility, and five small hydro projects.

PASNY owns a large network of transmission lines which they share with investor-owned utilities. PASNY is also a member of the Power Pool. With the exception of a few large industrial customers, PASNY does not deliver electricity directly to ultimate users but relies on the seven investor owned utilities to either buy and resell the power or to transmit and distribute the power to PASNY customers.

Unlike a utility, which combines all of its costs in a blended rate, PASNY charges a separate rate for each of its power plants. PASNY rates are not regulated by the state Public Service Commission. Instead, sales of electricity generated by PASNY are controlled by the federal Niagara Redevelopment Act and the State Public Authorities Law. PASNY has contracts with individual businesses or municipalities for the sale of power.

E. Municipal Electric Systems and Rural Electric Cooperatives

The 51 municipal and cooperative electric systems, serving fewer than 2% of the people in New York, own and operate their own distribution networks within their service areas. Under federal law, most of the 51 are entitled to preference in purchasing inexpensive Niagara hydropower from PASNY. Access to PASNY hydropower enables these systems to provide electricity at some of the lowest rates in the nation.

Rates of municipal electric systems and rural cooperatives are established pursuant to contracts with PASNY, consistent with the federal Niagara Redevelopment Act. Municipal systems receiving power from sources other than the Power Authority are regulated by the state Public Service Commission.

F. Energy Efficiency Providers

Although discussion of electricity costs tends to focus on rates, rates are not the only factor in establishing electricity costs. The bills customers pay reflect usage levels as well as rates.

Between 1973 and 1992, New Yorks electricity consumers reduced their usage by 28 percent. Utilities, the Power Authority, private energy service companies, and various state agencies encouraged consumers to reduce their usage by providing energy audits, financing assistance, and direct subsidies for the purchase of energy-efficient equipment. Efficiency programs run by utilities are regulated by the Public Service Commission. The costs of these programs are included in utility rates, but are offset by lower customer bills due to reduced usage. Programs run by the Power Authority are funded by the participants energy savings.

There is considerable controversy over who or what is responsible for New Yorks relatively high electric prices. Contracts between utilities and independent power producers, nuclear plants, and taxes are among the factors commonly cited. There is a difference of almost 4 cents per kilowatt-hour in average electric prices between New Yorks utilities and the national average due to:

• Higher operating costs, including higher operation and maintenance costs, wages and benefits,and fuel and purchased power costs;
• Higher utility capital costs; and
• Higher federal, state, and local taxes

The influence of these factors in explaining the price differences between New Yorks utilities and the national average varies by company as shown by Table 3.

Source: Financial Statistics of the Major Privately Owned Utilities in New York State, 1994; New York State Energy Plan, 1994.

 Type of Fuel Affects Cost

Differences in the prices of primary fuels used in the generation of electricity affect how electricity costs in New York compare with the rest of the nation. As illustrated by Figure 3, the fuel mix used by New Yorks electric industry is considerably more diverse than the national average. Although fuel diversity prevents price shocks and enhances reliability, in the short term it may have costs. For example, more than 50 percent of electricity nationwide is generated using coal, a relatively inexpensive fuel, while coal accounts for less than 25 percent of the fuel generation mix in New York.

 IPP Contracts Too High

Another factor contributing to higher electric prices in New York appears to be the cost of purchased power from IPPs. Many of the long-term contracts entered into in the late 1980s were based on energy price forecasts that were, in hindsight, too high. This is due largely to reductions in demand for electricity and a lower- than-anticipated price of oil. As a result, utilities are now paying more for independent power than if they were to generate the energy themselves or purchase the power on the spot market. Although some of these costs may be recovered by ratepayers in the future, the front loaded contracts, which provide for higher payments by utilities to independent power producers in the early years of the contract, are costly now.

 Paying for Unused Power

Excess generating capacity is another reason for New Yorks high electric rates. Excess capacity tends to result in high rates because ratepayers are paying for power plants that are not being used. According to the 1995 Load & Capacity Data Book of the New York Power Pool, the states electric generating capacity is currently 8 percent more than what is needed, and no new generating capacity will be required until after 2004.

 Some Nuclear Plants Prove Poor Investment

Another factor affecting prices is that the states utilities, to varying degrees, have made significant investments in nuclear generating facilities. Some of these have turned out to be uneconomical because, like long-term IPP contracts, they were based on inflated price forecasts. Nuclear plants have also cost far more than they were originally designed to cost, due to increasing concerns over safety. Under the current regulatory scheme, utilities can recover costs from ratepayers for nuclear facilities and contracts with independent power producers, to the extent that the PSC determines the costs were prudent at the time they were incurred.

 Ratepayers Carrying Burden

The only cost factor on which there is little dispute is the tax burden on New Yorks utility ratepayers. On average, 43 percent of the price gap between New York and other states is due to higher taxes paid by New York utilities. Local taxes account for 56 percent of all taxes paid by the states utilities; state taxes account for 34 percent; and federal taxes account for 10 percent.

Electricity prices may affect companies decisions to locate or expand in New York and, consequently, the number and quality of jobs created and retained in the state. New York businesses must compete with those in other states with lower electric costs. In some cases,companies in New York have been forced to either leave the state or close down. Even where energy represents a relatively small percentage of a facilitys overall expenses, high electric costs may play an important role in a location decision. Firms in the process of deciding whether to locate to a new facility in New York are even more likely to be influenced by the relatively high cost of energy. For some large companies, major costs, such as material supplies and labor, are uniform throughout the nation, and any variation in local costs, such as energy, becomes significant. Conversely, facilities that purchase supplies locally will be sensitive to the impact that high electric costs have on local suppliers.

As Figures 4 and 5 show, the commercial sector consumes nearly half of all electricity in our state. Nationwide, the commercial, industrial, and residential sectors each represent approximately one-third of electricity consumption. However, the amount of energy consumed by each customer differs according to the energy intensiveness or cost of energy consumed relative to other operation costs of the sector.

Table 4 shows that the most electric energy intensive sector in New York States economy is the manufacturing sector. And the most job intensive sector is the service sector. Because the cost of electricity represents such a significant portion of business costs in the manufacturing sector as compared to other sectors, electricity costs may play a more critical role in job creation and retention in the manufacturing sector. Also, the more electricity intensive the business, the more effect electricity prices may have on business location and expansion decisions.

¹1994 NYS Energy Plan using 1982 data from DOE.
²May 1995 data from NYS Department of Labor.

 Competition: Some Central Policy Issues

• How extensive are the systemwide cost savings that could potentially result from competition?

• What other policy goals must be accommodated in a restructuring of the electricity industry? Is competition compatible with resonably affordable service for all residents? Energy efficiency? Environmental improvement and longrange planning? To what extent can or should a competitive industry be regulated to achieve these goals?

• How can dislocations and inequities in the transition to competition be minimized?

While increasing competition in the electric industry offers the potential for lower overall rates and a healthier economy, it also presents significant risks. Some suggest that competition is inevitable, but there is much debate over the nature of the market structures that a competitive industry should employ. Questions also arise regarding the transition from the current market structure to a more competitive structure. In the end, nearly everybody favors competition, but what is required is fair competition. Electricity producers must be able to compete fairly, and the outcome must be fair to consumers. Issues include the potential benefits of retail wheeling, the effects of retail competition on smaller customers, the possible impairment of reliability, fuel diversity, and energy efficiency, and the effects on utility employees and investors.

Competition can reduce prices by directly exposing industry participants to the risks and rewards of their decisions, while increasing customer choices. Several models for competition have been discussed during the Public Service Commissions Competitive Opportunities Proceeding (Case 94-E-0952) and similar proceedings in other states. Specific proposals have been put forward. For example, a great deal of discussion centers on the difference between wholesale and retail competition. Table 5 indicates some of the key features of the current system and wholesale and retail competition. Although this report describes the differences between wholesale and retail competition, it is important to note that any specific competitive proposals may combine elements of each type of competition. The challenge faced by policy makers is not simply to choose between wholesale and retail competition, but to establish a competitive structure which best meets policy goals.

A. Wholesale Competition

Under a system of wholesale competition, utilities continue providing retail service to all customers, but purchase electricity in a competitive wholesale market. Due to recent state and federal laws, partial wholesale competition has already been achieved. The New York State Public Service Law requires utilities to consider all reasonably available alternative sources of supply prior to making significant capital investments in electric capacity. The National Energy Policy Act requires utilities to transmit power for purposes of wholesale competition. The Federal Energy Regulatory Commission recently proposed a rule requiring utilities to provide transmission services to all energy producers.

 FERC's Proposed Rulemaking

• Utilities must provide wholesale transmission service to other generators on terms comparable to the service they provide themselves.

• Utilities are entitled to recover 100% of any investmant stranded by loss of wholesale customers.

• Recovery of utility investmant stranded by retail competition is a matter of state jurisdiction.

Utilities are not, however, required to divest themselves of their generating facilities. Nor are existing utility facilities and independent power contracts required to compete against other sources of supply. An aggressive approach to wholesale competition, exposing existing facilities and contracts to market pressures, would create stranded investment problems. That is, existing investments in some power generating plants of both the utilities and IPPs could become uneconomical in the sense that the prevailing market price under competition would not permit full recovery of the investment.

B. Retail Competition

Under a system of retail competition, consumers are free to purchase electricity from power producers other than their local utilities, and local utilities are required to transmit or wheel the power from the producers to the customers. Because power is currently available on the market at lower prices than retail rates generally charged by New Yorks investor-owned utilities, customers could achieve significant savings by entering into contracts with competitive generators, utilities in other service territories, or utilities in other states.

C. Risks of Competition

Competition could provide substantial benefits to electricity consumers in the state. However, if not properly managed, an immediate transition into competition could adversely affect ratepayers, investors, and current energy policy goals.Competition proposals offering immediate benefits to some customers must be analyzed to determine whether they will result in long-term benefits to all customers, or merely shift burdens.

1. Risk to small consumers

The customers best able to take advantage of retail wheeling are larger energy consumers. The customers with the least bargaining power to purchase power elsewhere i.e. residential and small commercial customers could experience large and volatile rate increases. If a number of customers were suddenly to stop purchasing power from their local utility during the transition phase from the current regulatory system to retail competition, the utility would have to recover all of its fixed costs from a smaller pool of customers. This exodus of customers could result in substantial rate increases, which in turn may lead more customers to purchase power from other producers, necessitating additional rate increases. Although it is likely that purchasing pools or buying cooperatives would be formed to enable some small customers to participate in bulk purchases, it is questionable whether this segment of the market would develop rapidly enough to avoid some of the consequences described above. It is also a concern whether such purchasing pools would be available to consumers in remote rural areas or some urban areas, or to consumers with very low usage or with troubled payment histories.

One way to mitigate this adverse effect is by requiring all participants in the electricity supply industry to contribute to a fund continuing electric service at regulated prices to consumers for whom there are few options. It is unknown, however, whether the costs would outweigh the benefits of retail competition for other consumers.

2. System Reliability

Maintaining the reliability of the electric system is of paramount importance. Some are concerned that opening up the utilities transmission and distribution systems to other power producers will make it more difficult for utilities to maintain the high standards of reliability brought about by the creation of the New York Power Pool. If electricity is being generated by producers with no statutory or regulatory obligation, it may be more difficult to coordinate all of the sources contributing power into the grid, particularly during emergencies. There is also concern that power producers in a competitive environment would hesitate to assist each other during storms and other emergencies.

3. Fuel Diversity

New York has a very diverse mixture of fuel sources for its electric generation system. This enhances the reliability of the system and provides insulation from price shocks due to sudden fluctuations in the cost of any one particular fuel. Under the current regulatory structure,any investments in new generating capacity must be evaluated to determine their impact on fuel diversity. In an unregulated market, types of generating technology and fuel choice, driven by choice, may be less diverse and more vulnerable to interruption.

 Utility-Sponsored Energy Efficiency Programs

• fluorescent lamps and fixtures
• air-cooled packaged air conditioning equipment
• optical reflectors
• packaged water chiller
• metel halide and sodium vapor lamps and fixtures
• packaged terminal air conditioning units
• efficient magnetic lamps and electronic ballasts
• T-8 fluorescant lamps and electronic ballast systems
• LED exit signs
• solar window film
• high efficiency electric air conditioning

4. Energy Efficiency Programs

From 1990 to 1994, New Yorks utilities spent over one billion dollars on energy efficiency programs for their customers. According to the Public Service Commission, these programs will reduce customers energy bills over time, more than compensating for the cost of the programs.

Such programs may not be able to continue in a purely competitive marketplace. One of the most frequently-cited barriers to the introduction of energy efficiency technology is the fact that consumers tend to invest only in technologies that pay for themselves within one or two years. Power producers, on the other hand, are able to make investments that require twenty or more years to pay for themselves. This places energy efficiency at a competitive disadvantage.

5. Stranded Investments

Electric utilities have made investments in generating facilities in order to fulfill their obligation to provide service. Changing economic or regulatory circumstances may render some utility investments uneconomical, even though the investments were prudent at the time they were undertaken.Historically, utilities have been entitled to recover their capital costs for all prudent investments.

A sudden transition into retail or wholesale competition could leave many of the states utilities holding stranded investments for which they could not recover their full capital costs. Some utility-owned plants, particularly the nuclear plants, have such high capital costs that the utilities may have to assume substantial losses, possibly to the point of bankruptcy, in order to be competitive with other power producers.

Another type of stranded investment consists of long-term power purchase contracts signed by utilities at rates that may exceed market rates. If these contracts are honored and their costs are passed on to utility customers, the utilities will have trouble competing with other power producers.

A third type of stranded investment is regulatory assets. These are utility expenses for which rate recovery has been extended over a number of years. Examples of such assets are the Shoreham Nuclear facility debt and expenses of utility energy efficiency programs.

Although the utilities may have difficulty marketing their power at rates that allow full recovery of their power plants costs, purchase contracts, and regulatory assets utilities do own transmission facilities with substantial value. The market value of utility-owned transmission facilities probably exceeds the costs. And the value of the transmission system may be used to offset the cost of utility stranded investments resulting from the advent of competition.

6. Stranded Benefits

While utilities face stranded investment problems, consumers face the threat of stranded benefits. If consumer service and other functions currently performed by utilities are no longer performed in a competitive marketplace, many sectors of the states economy would experience a significant loss. The question of competition cannot be addressed without facing the fundamental policy issue of the utilities current role in providing these programs.

 Program Functions of Electric Utilities

• Universal Service at Regulated Prices
• Energy Efficiency and Environmental Programs
• Economic Development Subsidies
• Low-Income Assistance Programs
• Outreach and Education/Customer Information
• Resource Planning
• Research & Development
• Tax Base for Local and State Governments

7. Impacts on Employees of Energy Providers and their Communities

The decline in demand for electricity that accompanied the recent recession, coupled with mandatory purchases of power from independent power producers, forced utilities to curtail operations at some power plants. This resulted in significant job losses for employees of these plants and impacts on the communities where the plants are located. Cost-cutting efforts by the utilities have led the companies to lay-off workers throughout their systems. A transition to competition could result in further displacement of utility workers.

On the other hand, the presence of some power plants operated by independent power producers contributes to the stabilization of jobs at facilities that are the steam hosts, or users of steam created by the capture of waste heat from the independent power plants. This steam supply allows facilities to benefit from lower operatonal costs.

The displacement of workers that may result from competition may result in the need to retrain or reassign workers. In this way, we can ensure expertise and economic benefits for the community are not sacrificed by efforts to obtain the least expensive power.

D. Competition in Other States

New York State is generally keeping pace with other states in the movement toward competition. As of October 1995, no state has required full retail competition. Regulators in several states, including California and Massachusetts, have taken more detailed positions than New Yorks, but it remains unclear when and to what extent competition will be required. Regulators in 26 states, including New York, are examining competition.

Current data on New Yorks utilities are readily available through the Public Service Commission and the New York Power Pool. However, recent budget cuts at the state and federal levels, most notably the elimination of the State Energy Office, have made it more difficult to assemble current data on comparative electricity costs. The data presented in this report are derived from the following sources:

New York State Energy Plan, 1994

New York State Public Service Commission, Financial Statistics of the Major Privately Owned Utilities in New York State, 1994

New York Power Pool, Load and Capacity Data, 1995

Power Authority of the State of New York, Annual Report, 1994

United States Dept. of Energy, Energy Information Administration

New York State Dept. of Public Service

New York State Energy Research and Development Authority

New York State Dept. of Labor

Energy Association of New York State

Independent Power Producers of New York

Edison Electric Institute

MYKYTYN Consulting Group, Inc.

Public Utilities Commission of the State of California

Massachusetts Dept. of Public Utilities