By Mark Seratoff

7/29/11

Imagine going into a store in the morning and buying a loaf of bread for $2. You’re having a party in the afternoon and you need more bread. You run down to the same store and find the price has changed to $10. This has happened before and is allowed by regulators, but because you need the bread, you fork over the $10, get the bread and go home.

Sound absurd? Not really. This happens every day with the cost of electricity on Long Island. On July 12, during a hot spell, the cost of electricity on LI was $263 per megawatt hour at 3:44 p.m. At that same time, it was $88/MWh in the Mohawk Valley and $75 in Western New York. That morning, the cost was $54 on Long Island, $41 in the Mohawk Valley and $39 in Western New York.

The cost of electricity varies by 500 percent during the day, and the cost of power is 350 percent higher on Long Island than the cheapest region in the state.

How can this be? Paul DeCotis, vice president of power markets for energy costs are higher because we pay for efficient out-of-state generators and a congestion surcharge at peak times. Cheap hydro power from upstate is difficult to bring here because of transmission constraints. Also, expensive peaker generators are used here to accommodate the load.  Taxes are higher on LI generators than those in the rest of the state.

Another anomaly that results in LI having the highest power costs in the state is the way the New

York Independent System Operator runs their day-ahead price auction for electrical power.

Counterintuitively, the highest bid becomes the price all power companies are paid. This reverse auction, according to the ISO, encourages power companies to have adequate power supplies available.

Mathew Cordaro, power industry expert, suggests rebuilding the antique simple-cycle LIPA, explained that Long IslandNational Grid generators to state-of-the-art units. This would significantly increase generation on LI, as well as create jobs and lower pollution. Congestion charges and costs of importing efficient generation from off-Island would be eliminated. In fact, LI could export power, further cutting costs.

Having the most expensive electricity costs in the state is unacceptable and calls for correction.

Seratoff is coordinator of the Sustainable Energy Alliance of LI.