Energy broker hails veto of plan to shrink price caps.

ConsumerPowerline has lauded the Federal Regulatory Commission's (FERC) decision to protect New York City's energy markets by rejecting a proposal that the firm had warned could destroy the city's demand response program, and lead to blackouts this summer.

In a March 6 decision that the energy firm says helps preserve demand response and protect New York from the likelihood of "going dark," this summer, FERC rejected the New York Independent System Operator's (NYISO's) plan to ratchet down price caps for New York City's reserve power, to which three major power generators are subject.

ConsumerPowerline (CPLN) had argued that a plan to lower price caps could wipe out an industry that has played such a significant role in the reliability of the power grid-and place New York City at risk of major blackouts this summer.

CPLN president and founder Mike Gordon said, "We're committed to work with all willing parties to propose specific and sustainable market fixes, near and medium-term, and to contribute to Mayor Bloomberg's call for a 'plan for sustainability' issued on December 12, 2006."

"We're a city that runs on electricity, yet some of our power grid dates from the 1920s,'" the Mayor said that day.

The city's Demand Response Program--a kind of electricity insurance policy--depends on participation from large energy users who are paid to relieve the electricity grid when the threat of a power outage looms.

In 2006, Mayor Bloomberg requested a program increase for Demand Response. This was part of a "Comprehensive Reliability Planning" effort to launch an innovative three-year initiative to reduce peak electric demand by a total of 675 megawatts--or the equivalent of a large power plant.

The Mayor has consistently backed demand response; all parties are currently aiming for demand response help to be brought to bear as rapidly as is possible.

ConsumerPowerline's Mike Gordon--widely quoted on the issue over the last several weeks--said, "The NYISO proposal, backed by Con-Edison and the state Public Service Commission, was dangerous in its prospective impact on the reliability of our power supply."

The demand response "electricity lifeline" currently pays large energy consumers close to $60 million each year to protect New York's energy security.

As a result of the latest decision, "We can double our commitment to demand response in the next three summers," said Gordon. "Perhaps we can get most of the way there by May of this year."

The market closes for Demand Response participation on March 30. New York City companies such as Morgan Stanley, Macy's, New York University, CB Richard Ellis, Starwood Hotels and Resorts and dozens of others, help the city keep the lights burning through their participation demand response.

In connection with its commitment of support for these programs, ConsumerPowerline announced the formation of a coalition of market participants, the New York Coalition for Power Reliability ("CPR") that would heed the Mayor's call to organize concerted expansion of critical electric supply reliability programs.