The New Capacity Zone Faces Groundswell of Opposition from Local, County Governments and Federal Officials

CONTACT:  Citizens for Local Power
(845) 489-0830

Rosendale, NY. - Local and county governments and federal elected officials are coming out in numbers against the “new capacity zone” (NCZ) approved by the Federal Energy Regulatory Commission (FERC), which they say will needlessly increase electricity rates, create an unfair burden on upstate communities, harm small businesses, and incentivize investment in fossil fuel-based generation over renewable energy.  Resolutions of opposition to the NCZ have been passed by the Ulster and Dutchess County Legislatures, the Ulster County Association of Town Supervisors, and the Towns of Rosendale, Woodstock, Plattekill, New Paltz, Rochester, Denning, Olive, and Pleasant Valley.  Senator Charles Schumer (D-NY) and, most recently, Representative Chris Gibson (R-NY Dist. 19) have also weighed in with the FERC on behalf of Hudson Valley communities.

In August 2013, the FERC ruled that the new capacity zone was needed to address constraints in transmission lines running through the Hudson Valley, which during periods of peak demand, when energy use spikes due to heat or cold, are unable to carry enough supply from upstate sources to meet downstate needs. The resulting transmission “bottlenecks” make electricity more expensive as older, less efficient plants are powered up to meet the extra demand. This new zone would incorporate the Hudson Valley into the same capacity electricity market as New York City and Westchester, where demand and electricity prices are highest.  

The new zone is expected to increase electricity bills for residential, commercial, and industrial customers in the Hudson Valley by $230 million.  

According to the FERC, raising the price of electricity in the Hudson Valley will attract investment in power plants and reduce transmission congestion.

Not so, says the NYS Public Service Commission (PSC), which argues that New York State is already planning upgrades to transmission lines that will make the new capacity zone unnecessary, and that the result may only be to increase profits for existing capacity generation owners at ratepayers' expense. According to the PSC, the NCZ may do nothing to increase investment in new capacity if potential investors believe the state's transmission upgrades will drive down wholesale electricity prices. In November, Senator Charles Schumer urged the FERC to delay implementation of the new capacity zone until at least 2017 to provide sufficient time for the transmission upgrades to be realized and assessed. The PSC and other parties, including Central Hudson-Fortis, have appealed the FERC ruling and it is now in re-hearing.

Citizens for Local Power (CLP), a grassroots organization focused on helping the mid-Hudson region transition to a local green energy economy, believes the rehearing process provides an opening for communities in the mid-Hudson Valley and their federal representatives to continue to press the FERC to postpone indefinitely its August 13 ruling.  

“The FERC proceedings occurred under the radar, with no effort made by federal regulators to inform or involve the communities that would be most impacted,” said Jen Metzger of CLP, who is also a member of the Rosendale Town Board. At a forum organized by CLP on Jan. 29, most of the nearly 100 people who attended were hearing about the new capacity zone for the first time.  “We've been working to fill this information gap, and have been really impressed by the level of bipartisan engagement at local, county, and federal levels to oppose this unnecessary and unjust decision by the FERC,” Metzger says.

This past week, Congressman Chris Gibson sent a letter to the FERC expressing his
“serious concerns” with establishing the new zone.  “I reject the notion that the only way to invest in infrastructure is to force price increases,” Congressman Gibson stated in a March 3 letter to FERC Acting Chairwoman Cheryl LaFleur. “Furthermore, there is no guarantee that my constituents will see a benefit from their higher rates.”  

“If the new capacity zone encourages any investment in generating capacity at all, it will be in dirty, fossil fuel-based generation, taking us in the wrong direction in New York State,” said Manna Jo Greene, Ulster County Legislator and also a member of CLP. “We face a climate crisis and need to get serious about investing in microgrids, fuel-free distributed renewable generation, and demand-reduction programs to reduce peak demand and grid dependence while increasing local resilience to power outages.”

CLP is organizing a second informational forum on Monday, March 24 at 7 pm in Kingston, to update municipal officials and the public on both the new capacity zone and planned transmission upgrades.  The forum will be held at Ulster County Legislative Chambers, 244 Fair Street (6th Floor).