Yesterday, NYISO reported that wholesale electricity prices in New York dropped to their lowest level since 2003. NYISO's President and CEO attributed the drop to, "the reduced cost of producing power, as well as lessened demand for electricity resulting from the economic downturn." For example, natural gas prices declined 63% from June 2008 to June 2009, lowering the cost to generate power. Coincident with NYISO's report, Assembly Chairmen Cahill and Brodsky released a letter they had sent to the NYISO President that continued their committees' investigation into what they deem the "bizarre" electricity market in the State. The inquiry is focusing on NYISO practices, the market clearing price mechanism, disclosure and openness. The full text of the NYISO Statement is available on the NEM Website.

The Commission dismissed the electric and gas delivery rate cases filed by NYSEG/RGE that had sought an increase in rates on an expedited basis. Commission Staff had filed a motion to dismiss the rate proceedings, arguing that the utilities failed to meet the standard for rate review the Commission established in its Order approving Iberdrola's acquisition of the companies which limited the companies from filing a rate application prior to September 2009 unless their financial performance would fall to levels jeopardizing their ability to provide safe and reliable service. In its Order, the Commission found that, "the Companies’ financial performance, assuming exercise of prudent management, will not fall to levels that would jeopardize their ability to provide safe and reliable service in the absence of rate relief prior to the time new rates would be available under the Merger Order. . . Thus, we find that, notwithstanding the current global financial crisis, the Companies will be able to access the capital markets to the extent necessary. . . We conclude that the Companies’ financial health depends on reasonable financial management by the Companies and their corporate parents, not on emergency rate relief." The full text of the Order is available on the NEM Website.

The Commission determined to issue a proposed rulemaking to consider changes to gas utility security requirements, which had been identified as a barrier to marketer participation in retail access. The Commission proposes changes to balance marketers ability to provide adequate security with the utility's risk of marketer default. The proposed rules pertain to: 1) use of marketer accounts receivable in POR programs as fulfillment of some part or all of security requirements; 2) adoption of standard language for financial instruments used for security; and 3) reasonable criteria for utilities to use to establish the amount of security needed for licensing purposes. Comments on the proposed rulemaking are due June 3, 2009. The full text of the Proposed Rulemaking is available on the NEM Website.