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It is often said that there are three kinds of lies: lies, damned lies, and statistics. But despite their reputation for being manipulated, numbers often tell us something important and true.
For example, take the 4,400 megawatts of electric generating capacity New York has lost since 2019 and compare it to the 2,900 megawatts of electric generation that has been added.
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There is no lie behind those numbers, only a simple and straightforward truth: A 1,500-megawatt deficit is enough to power an entire upstate city, and the resulting drop in reliability margins has forced the grid operator to make a record number of requests asking large energy users to interrupt their operations and curb their electricity use.
This is not normal. During this time, other large states, including Ohio and Virginia, have been adding generation while using our shortage to attract big manufacturers and other energy-intensive industries.
Policymakers who have gone along with this failing status quo need to take a hard look at the numbers and decide whether they want to continue ignoring the truth or act by reforming the state’s energy markets.
While some lawmakers in Albany may not view the issue with urgency, the New York Independent System Operator does. In the release announcing its latest Power Trends report, NYISO states plainly: “An all-of-the-above approach to investment, supported by effective competitive electric markets, is needed now to maintain system reliability and support the state’s economic and environmental goals.”
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Whether that investment materializes depends on the structure of New York’s electricity market.
Today, the utility billing you for electricity isn’t the one producing it. Independent generators, whether nuclear, gas or renewable, produce power and, most importantly, set the price utilities must pay to access the electricity you need.
However, the numbers beg a simple question: If this model is working, why has New York experienced a net loss of generating capacity while demand continues to grow?
The numbers are clear: The existing model is no longer attracting the investment needed to address both rising demand and decreasing supply. This is particularly striking because tightening supply would ordinarily be expected to encourage new investment.
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To deliver a true all-of-the-above energy strategy, New York must let every capable player, including utilities, build the power generation our grid urgently needs.
The goal is not to replace independent generators, but rather to increase supply by expanding the pool of entities that are permitted to build generation. This will promote more affordable and efficient construction of new electricity sources, allowing all players to compete fairly in bringing the best resources online.
It can also drive better oversight of electric generation. New Yorkers outraged by weather-driven supply spikes often complain to the Public Service Commission, but the agency has zero authority to regulate independent suppliers. However, the PSC could regulate power plants owned by the utilities, creating a new, needed layer of accountability that should be attractive to anyone who wants to see oversight of supply charges.
Utilities are mandated to maintain financial transparency about how every customer dollar is invested. That would bring a greater portion of the state’s generation under the transparency and reporting requirements already imposed on utilities.
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Reasonable concerns about utility ownership should be addressed through lawmaking and regulation. But flatly refusing to evaluate it while the supply problem worsens makes little sense.
New York’s growing electricity generation shortage is a crisis that should compel policymakers to evaluate every credible option to restore supply, including utility-owned generation. If we want to attract economic development and the jobs that come with it, we must invest in electric generation. The status quo is failing.
Justin Wilcox is the executive director of Upstate United.
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