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N.Y. PSC Says PSC Consent Required for Termination of Blackstart Service
September 29, 2011
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The New York PSC issued a declaratory ruling yesterday finding that generators are required to obtain the Commission's consent, pursuant to Public Service Law (PSL) §70, to discontinue blackstart service (11-E-0423).
A declaratory ruling to that effect had been requested by Consolidated Edison, in response to TC Ravenswood's intention to cease providing blackstart service.
The PSC made no decision regarding whether any generator will be required to continue to offer blackstart service, finding only that PSC approval is required prior to any discontinuation.
"Our authority over the continued provision of Blackstart Service flows plainly from PSL Article 4, which explicitly establishes our jurisdiction over corporations engaging in the generation, transmission, distribution, sale or furnishing of electricity," the PSC said.
"This includes, under PSL §66(1) and (2), 'general supervision of ... all ... electric plants owned, leased or operated by any ... electric corporation.' ... The Commission may also 'order reasonable improvements and extensions of the works, wires, poles, lines, conduits, ducts and other reasonable devices, apparatus and property of .. .electric corporations and municipalities.' Moreover, the Commission maintains authority under PSL §65(1) to ensure 'every electric corporation and every municipality ... furnish[es] and provide[s] such service, instrumentalities and facilities as shall be safe and adequate and in all respects just and reasonable," the PSC said.
Furthermore, "PSL §70 adheres to the transfer of utility property and provides the opportunity, before the transaction occurs, for evaluation of the impact on electric service which the transfer may cause. Since a discontinuation of service is functionally the same as the transfer by the utility of its property, otherwise used to provide electric service, to another, such a discontinuation of service is subject to §70 review and approval," the PSC held.
"We reject the generation owners' arguments that our authority under PSL Article 4 does not extend to electric corporations that lack a franchise and provide only wholesale services. Although certain provisions of PSL Article 4 refer to electric corporations that have a 'franchise,' the relevant authority in PSL §§ 66(1) and 66(2) cited above does not contain this language. Moreover, the obligation to provide 'safe and adequate' service under PSL §65(1) applies to all electric corporations, and PSL Article 4 contains no distinction between an electric corporation providing wholesale services and an electric corporation serving retail customers," the PSC said.
"While we are not, in this proceeding, ordering any particular generation owner to provide Blackstart Service, we nevertheless note that PSL §66(2) provides authority to order reasonable improvements necessary to promote the public interest and preserve public health and that such improvements may include the provision of Blackstart Service," the PSC noted.
The PSC said that the "flexible" application of Article 4 afforded to competitive generators upon restructuring did not carry with it a general exemption from all of the substantive provisions of that Article. "Rather, it left generators clearly subject to certain PSL Article 4 regulation of their activities. In particular, we refused to waive the application of PSL §70 to EWGs [exempt wholesale generators]," the PSC noted, citing subsequent orders concerning lightened Article 4 regulation which explicitly provided that EWGs remain subject to PSL jurisdiction with respect to matters such as safety, reliability and system improvement.
The PSC also dismissed claims it was preempted by federal authority on this matter.
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