Assembly Democrats say New Yorkers overpay $2.2 billion a year for electricity. They say the system sets prices at the highest level and claim collusion is part of the process.
The head of an industry trade group, however, said the claims are wrong.
Gavin Donohue of Independent Power Producers of New York says the system encourages cleaner generators of electricity such as wind or hydro power, which can profit from higher prices. Less efficient, greater polluting and older coal plants would profit less or not at all under the system, he said.
"What you have here is price fixing secret, elegant price fixing," said Assemblyman Richard Brodsky, a Westchester Democrat whose committee is examining the system under decade-long de-regulation of the energy industry in New York. "Even if there wasn't collusion, the system is nutty... it probably means that with a stroke of the pen, you could reduce everyone's bill by 10 percent."
Assembly Democrats have long opposed deregulation of the industry begun under the Republican administration of Gov. George Pataki.
Donohue said New York's energy market is evolving and is already providing a trend of lower prices, when adjusted for inflation. He called the Assembly proposals to re-regulate or drastically change the system "unwarranted extreme measures."
Donohue acknowledges higher prices for electricity are set under the current system, but said there is no collusion to profit from higher prices.
"It's totally inappropriate for an elected official to say that, given he has no evidence," said Donohue, who had worked in the Pataki administration. "We have a remarkably different story to tell."