COLONIE — New York Public Service Commission Chairman Garry Brown assured utility company officials Wednesday that electricity and gas rates they charge New York residents and businesses will be going up, no matter what.

“The worldwide demand for fuel is going to result in high energy prices and that frankly means our electricity prices are going up,” he said.

The PSC regulates New York’s utility companies and has final say over rate increases related to transmission costs, but not fuel commodity costs, which utilities can pass on to consumers without a vote by the commission.

Brown represented the PSC at the annual meeting of the Independent Power Producers of New York on Wednesday at the Desmond Hotel in Colonie. He said since New York deregulated its electricity markets beginning in 1998, the cost of oil has jumped from $14 a barrel to $124, natural gas has soared from $2.15 to $11 per 1,000 cubic feet, and the price of Appalachian coal has risen from $34 a ton to $102.

“Way too much time has been spent lately arguing about [restructuring deregulation] and frankly I think it’s a lot of wasted time. We’re trying to invent a regulatory regime that is going to take these basic economic factors and make them go away and they’re not going to go away,” he said. “As these prices go up the only chance for people to reduce their bill impacts is to save” energy use through energy-efficiency measures.

However, the PSC has created a mechanism for utilities to raise their rates if energy use goes down, thus eliminating any savings for New Yorkers.

Otherwise, if consumer demand for electricity goes down in New York’s deregulated electricity markets, utilities will lose money — unless they lower their prices to stimulate more demand.

Brown said the PSC has developed policies to remove the incentive for companies to reduce electricity rates to increase sales because the commission is dedicated to Gov. David Paterson’s “15 by 15” goal to reduce electricity consumption by 15 percent beneath the projected consumption levels of 2015. That plan is part of several proposals by Paterson to reduce New York’s carbon dioxide emissions, linked to global warming.

“We have something called a ‘revenue decoupling method,’ which is trying to make sure utilities [don’t have incentives] to keep on increasing sales in order to make money, so they can get a return even if there isn’t sales growth,” he said.

On April 18, 2007, the PSC directed utility companies to develop proposals for revenue decoupling mechanisms, known as RDMs, that would allow them to increase rates in proportion to the amount ratepayers conserve energy, to offset lost revenues. The PSC’s stated goal of the program was to create an incentive for utilities to participate in energy savings programs and “limit unnecessary load growth and delay or possibly avoid the installation of costly new distribution, transmission or generation facilities.”

Since then the PSC has approved RDMs for three utilities — Central Hudson Gas & Electric, NFG Co. and Con Edison Co. — as part of rate plan renewals, according to staff of the New York Public Service Department.

National Grid last week applied for early consideration of an RDM, even though its rate plan runs through 2011, as part of a package of proposals to create energy savings programs. Some of the programs included providing customers with 75 percent of the cost of new insulation up to $5,000, $50 toward the purchase of an energy-efficient clothes washer, $10 per window toward the price of energy-efficient windows and $25 for programmable thermostats. The total cost of the program was estimated by National Grid to be $220 million, which it has asked the PSC to allow it to pass on to customers in the form of a $1.50 monthly charge applied separately to both electricity and natural gas bills.

National Grid officials told reporters in a conference call last week that the RDM they’ve submitted to the PSC is meant to allow them to increase rates to recover 100 percent of revenues lost from customers using less energy.

William Flynn, National Grid’s vice president of government relations, attended the IPPNY meeting Wednesday. He said National Grid needs assurance that energy efficiency programs will not reduce the company’s revenues.

“With every kilowatt hour that we sell to our customers we recoup an investment [for infrastructure] — debt that we pay over a period of time,” Flynn said. “In this era of energy efficiency, which we are extremely for, our structure does not allow us to continually support our investment in infrastructure and continue supporting [reduced energy use]. Quite frankly, if it puts us in a position where we can’t continue to pay our debt . . . it would erode our ability to support our infrastructure.”

A rate increase application to the PSC normally takes 11 months from submission to approval, but approved RDMs can enable a faster rate increase, officials said. So far none of the companies with RDMs approved by the PSC has applied to use the plan to get a rate increase because of less energy sold.

Heather Briccetti, the Business Council of New York’s vice president of government affairs, said she doesn’t expect less energy will be consumed.

“This is a fantasy, use is not going down. Everyone’s got a Blackberry, everyone’s got a laptop. Those things are electricity-based. There is absolutely no way you are going to see a reduction in use,” she said. “This is all sort of pie in the sky.”