New York residents, including those in the north country, may have been overcharged for electricity over a series of months this year, according to the New York Independent System Operator, the agency that oversees the management of electricity transmission in the state.
Alcoa alone has seen an increase of $5 million on its bill in the first six months of this year, says Laurie A. Marr, Alcoa spokeswoman. In that same time, the Massena Electric Department spent almost $500,000 more for its power this year than it did over the first half of last year, according to Jeffrey M. Dobbins, MED treasurer.
Residents and companies may have paid an additional $100 million for electricity from January to June, according to the state Consumer Protection Board. Other estimates are much higher, amounting to hundreds of millions of dollars. A small number of electricity routing companies may have deliberately manipulated transit routes, causing the price hikes.
"There's been some unjust and unreasonable profits made and it's caused New York residents and businesses hundreds of millions of dollars," said Andrew J. McMahon, MED superintendent. "There's no parallel universe to ascertain what the costs would have been had the market gaming not occurred."
The Federal Energy Regulatory Commission has been quietly investigating the charges for two months, it announced Aug. 21. At least 39 organizations, including Alcoa and seven neighboring states that also were affected, requested that FERC keep them informed of the investigation's proceedings, according to its Web site. FERC officials could not say when the investigation would conclude or give any details.
"I can't answer the question 'did someone do something wrong,'" FERC spokeswoman Barbara A. Connors said. "All I can tell you is we're looking into it."
Ms. Connors would not say what actions are possible at the end of the investigation, but some are hoping to get refunds for the unnecessary charges.
"This is just for the first half of 2008 — these NYISO charges represent an increase of $5 million to (Alcoa's) total operating costs," Mrs. Marr said. "What we're hoping is that they can prevent these kinds of things so manipulation does not happen again. We'd also like restitution or refunds, like the governor's press release said."
"But it's important for every electric user in the state to know this affected them. It's just easier for us to see because our electric bill is so high," she added.
National Grid, like other electric companies, cannot estimate actual costs to its customers, spokesman Alberto Bianchetti said.
"There have been a lot of numbers kicked around by various sources" but none have been confirmed, Mr. Bianchetti said.
What actually caused the price hikes and whether it was intentional will be very difficult to determine because of the properties of electricity.
"This is the point when we all say we should have paid attention in science class," Ms. Connors said. "Electricity is a rare commodity — it follows the path of least resistance."
Because of the high volume of electricity flowing around the state, the power is scheduled to follow different routes. Problems arise because electricity is difficult to control and does not always follow the planned path.
In recent months, small amounts of power have been taking unplanned detours, which increases congestion and slows down delivery. To meet demands, more expensive electricity has to be transmitted to power companies, according to NYISO spokesmanKenneth M. Klapp.
The NYISO determined the congestion was intentional on the part of a few transit companies. FERC's investigation is scrutinizing the same companies, though it would not disclose any names.
"I can't tell you when (the unscheduled route) started," Ms. Connors said.
