By Jill Colvin
DNAinfo Reporter/Producer
CITY HALL — New Yorkers are shelling out an extra $2.2 billion a year on energy thanks to a bidding system that's akin to "price-fixing," New York State Attorney General candidate Richard Brodsky said Monday.
In his first major policy initiative of the campaign, the New York State Assemblyman said that reforming the way that energy is bought and sold will be his first priority if elected to office. Reforms, he said, could save New Yorkers 15 to 20 percent on their energy bills a year.
The way the system currently works, energy providers, including Con Edison, purchase power from generators like NRG to sell to consumers. Some of that energy is purchased through a bidding system that is overseen by an independent non-profit called the New York Independent Systems Operator (NYISO).
But according to Brodsky, instead of allowing energy providers to openly bid for power, driving the bids down, NYISO rules force providers to pay all generators the highest price paid to any generator on a given day, regardless of whether or not lower bids have been made. Those elevated prices are then passed off to consumers.
"This is robber-baron stuff from the turn of the century," Brodsky railed outside of City Hall Monday. "When people find out what is actually going on they will not accept it."
Brodsky said that New Yorkers shell out millions of dollars more than they need to for energy and called the NYISO's bidding system "price-fixing, pure and simple."
But Thomas Rumsey, NYISO's vice president of external affairs, vehemently denied the charges, saying in a statement that such auctions are not unique to New York, in fact have lowered costs and encourage higher-efficiency power.
"The uniform clearing price auction design has been shown time and again to produce the lowest total electricity costs to consumers," he said, adding that the cost of wholesale electric energy in the state is down more than $2 billion annually since the NYISO was formed.
The average cost of electricity in 2009 was $48.63 per megawatt-hour, 49 percent less than in 2008, according to the ISO's most recent report.
"Mr. Brodsky’s position illustrates the need for continued outreach to our elected officials so they can better understand and appreciate the immense value competitive energy markets have and continue to provide," Rumsey concluded.
This isn't the first time that Brodsky has attacked the energy industry. He has been a staunch opponent of the Indian Point power plant and has previously sued power providers over disruptions.
Brodsky is one of five Democratic candidates vying to replace Andrew Cuomo as the state's top lawyer. He is currently polling in the single digits behind frontrunner Nassau County District Attorney Kathleen Rice, recent numbers show.
