IPPNY Letter - Returning “Profits” Resulting from Participation of Electric Generating Facilities in NYISO’s Short-Term Electric Commodity Markets (Subpart B of Part TT of A.10008-B) - Pre-Empted by Federal Law; Use RGGI Money Instead to Fund POWER
Dear Governor Hochul, Leader Stewart-Cousins, and Speaker Heastie,
Subpart B of Part TT of A.10008-B is pre-empted by the Federal Power Act because it conflicts with the Federal Energy Regulatory Commission’s regulation of wholesale rates within the New York Independent System Operator’s (NYISO) competitive wholesale electricity markets. Court cases have affirmed this type of pre-emption, and IPPNY is available to provide additional information.
The proposal is also an unconstitutional taking. It would effectively cap the revenues that a generator could earn, but it would not provide any revenue floor to ensure a generator would have an opportunity to fully recover its costs.
Subpart B would require the Public Service Commission to assess and collect “excess profits” earned by electric generating facilities participating in the NYISO’s markets and would “require remittance to the state of any amount assessed.” According to the Assembly’s Budget Summary, this remittance would be used to partially offset the cost of the Assembly’s proposed Protect Our Wallets Energy Rebate (POWER) Checks (Part BB of A.10009-B). Instead of using a questionable source of revenue under Subpart B of Part TT of A.10008-B, IPPNY supports the use of money, which IPPNY Members pay, from the auction of allowances under the Regional Greenhouse Gas Initiative (RGGI) to fund POWER Checks. This approach is consistent February 20, 2026 letter by a group of Upstate Assembly Democrats, including Assembly Energy Chair Didi Barrett.
To date, New York power producers have paid over $3.3 billion under the RGGI program, including over $220.6 million from the March 11, 2026 auction, and RGGI is a recurring source of revenue, with allowance auctions occurring four times per year.
IPPNY supports the provision within the Assembly’s February 20, 2026 letter to increase the use of RGGI money for affordability beyond the provisions of the recently adopted 2026 Amendment to the RGGI Operating Plan. The use of RGGI revenues for affordability was recommended by IPPNY’s December 17, 2025 State of the State letter. The approved Plan provides 62% of RGGI funds for affordability of energy for consumers, and 34% of auction proceeds above the amount projected by the Plan would support a new ratepayer cost reduction initiative.
As a member of the Climate Action Council, I strongly support helping our state have affordable, reliable, and clean electricity. If you have any questions or need additional information, please contact me. Thank you for your consideration.
Sincerely,
Gavin J. Donohue
President & CEO
