State should proceed cautiously on deregulation, Con Ed chairman says.

New York risks upsetting its unparalleled energy reliability if industry deregulation and restructuring is not handled correctly, Consolidated Edison Chairman Eugene McGrath warned at a recent New York Building Congress forum.

"Restructuring is the greatest change Con Edison has made since the introduction of the electric light bulb," McGrath said.

Con Edison's proposal for restructuring, which was submitted by the company to the New York State Public Service Commission on October 1, would freeze electric rates for five years starting in April 1997 and give customers a choice of electricity providers beginning in 1998, McGrath said, while continuing to provide them with the most reliable electric service in the nation.

"A competitive market must take into account that New York City is a unique situation," McGrath said. "Our transition to full competition is not going to happen tomorrow." It is most important, he said, to ensure that New York City is supplied with power to meet such diverse electrical needs as high-rise buildings, subways, commuter trains and multi-national telecommunications companies, to name a few.

McGrath also discussed a recent Building Congress report which rated New York City's electrical service the most reliable in the nation. According to a survey of 75 utilities by Theodore Barry & Associates, which was included in the report, out-of-service time per customer in New York City and Westchester, both served by Con Edison, was nine minutes in 1992, compared to a national average of 104 minutes.

In relating how important it is to continue the uninterrupted flow of energy, McGrath noted that a loss of its data center can cost a financial service firm up to $5,000 per second.

"Reliable electrical service is a critical factor in the City's continued ability to retain business and attract new employers," Building Congress President Richard T. Anderson said. "We must do everything possible to guard against disruption of electrical service, especially in Lower Manhattan, where financial service firms and software companies require reliable power for computers and telecommunication."

"If we do it (deregulate the industry) right, we can help New York City address its competition problem," McGrath said. But he also warned that increased competition in the energy industry, in itself, will not lower energy rates significantly in the short term or make New York City and State competitive economically.

New York State, he said, must make the commitment to put an end to "excessive taxes and onerous regulations," noting that Con Edison currently is the largest taxpayer in the State of New York.