This was originally published by NBC 34 Binghamton on August 19, 2010.
Energy Price Fixing
We begin with what one attorney general candidate calls an energy price fixing scheme.
Reforming the way energy is bought and sold in New York State is one of the top priorities of current downstate Assemblyman and attorney general candidate Richard Brodsky. Brodsky says needed changes can save residents 15 to 20 percent on their NYSEG bills each month.
Here’s the current set-up, something Brodsky calls price fixing at its worst. Companies such as NYSEG or Rochester Gas and Electric buy some of the energy they need in long term contracts. A lot though is bought on the spot, as needed. Generators sell those companies the energy they need to meet customer demand.
Brodsky says the problem is years ago generators formed a not-for-profit corporation called the Independent Systems Operator and basically what happens is that the ISO forces NYSEG and other companies to buy energy from all generators at the highest price. Brodsky says the attorney general has the power to investigate, reform and even abolish not-for-profit corporations if wrong doing is found.
Richard Brodsky says, “Everyday your utilities sit in a room at the ISO with the generators. Let’s say they need 30 megawatts. The utility says I need 30. The first generators says I have ten, I’ll sell it to you for ten dollars. The utility says deal. The second generators says I’m more expensive, I’m not a nuclear plant, I’m a gas fired plant, I’ll sell you ten , but for 20 dollars. The utility says deal. The third one says I’m coal, I’m expensive, I’ll sell you the last ten you need for 30 dollars and the utility says deal. They have a 10 dollar deal, a 20 dollar deal and a 30 dollar deal. Under the system this group has put up, everyone gets paid 30 dollars. No one really believes it when I first explain it. “
Brodsky says NYSEG doesn’t make out on the deal but the cost does get passed along. He also says the scheme is costing New Yorkers more than $2 billion a year.
