Niagara Mohawk Power Corp. (NiMo) has asked the Federal Energy Regulatory Commission to rule that a New York state law violates the Public Utility Regulatory Policies Act of 1978 (PURPA) by requiring ratepayers, in effect, to reimburse gas-fired QFs (qualifying facilities) for payments made under a state-imposed, 4.25-percent natural gas import tax.
NiMo says that the tax and the reimbursement mandate will add $7.2 million to the electric bills of its customers in 1996 (em a figure that could climb to $13.5 million by 2006. NiMo believes the reimbursement requirement means that utility payments to QFs exceed avoided costs, as defined in PURPA. According to chairman and chief executive officer William E. Davis, the company believes PURPA should preempt the state law.
The filing has raised the ire of the Independent Power Producers of New York, Inc., whose executive director, Carol E. Murphy observed that the New York legislature mandated that the tax be recovered from utility ratepayers. "The fact that IPPs also act as tax collectors, just as the utilities do, has absolutely nothing to do with avoided costs, and is certainly no reason for regulators in Washington to begin second-guessing state tax policies and legislative prerogatives," said Murphy. t