PSC's Hearing On Central Hudson's Proposed Rate Hikes Draws Criticism

Oct 4, 2017

The New York state Public Service Commission has begun public hearings on Central Hudson Gas & Electric Corporation’s proposed electric and gas rate hikes. The PSC held the first two sessions Tuesday in Poughkeepsie where residents and legislators slammed the proposed increases.

Central Hudson has proposed an electric rate increase that would raise the average residential bill $4.19 a month and the average residential gas bill about $5.54 a month. The proposal calls for an increase in annual electric delivery revenues by $43 million (an increase of 7.9 percent to total revenues) and its gas delivery revenues by $18.1 million (an increase of about 12 percent in total revenues). John Maserjian is spokesman for Poughkeepsie-based Central Hudson.

“Central Hudson is looking to modernize our electric and natural gas systems to improve the safety, efficiency and resiliency of those systems,” Maserjian says. “We’re also looking to improve our computer networks. And we’re also seeking to improve, or enhance our environmental programs and our energy efficiency programs.”

PSC Commissioner Gregg Sayre describes the scantily attended first public meeting, one of two held Tuesday.

“’Hey, you need to make special arrangements, you need to take care of the low-income people who can’t afford the rate hike. You need to look at that particular class of customer.’ That was one of the comments this afternoon,” Sayre says. “Or they say, ‘You’ve got to do more to support renewable energy and keep rates lower in the future by doing that.’ That was another comment that we had just this afternoon. So the public has very interesting things to say.”

Comments about the impact on low-income residents continued in the evening session at Poughkeepsie Town Hall, mainly from Nobody Leaves Mid-Hudson, a party to the rate case. Jonathan Bix is executive director.

“Nobody Leaves Mid-Hudson is against the rate hike because it’s going to increase unaffordability, particularly for low-income people and people of color and lead to many, many more shutoffs, which are going to cause major health crises, lead to people having to make terrible choices between utilities and health care, utilities or food, and so that’s why we’re against the rate hike,” Bix says.

Democratic Dutchess County Legislator Joel Tyner offered comments.

“According to the financial statement that Central Hudson released in February this year, they cranked in $50.9 million in pure profit last year,” Tyner says.

Tyner says there should be no rate hike given that profit.

“And now they want to jack up the electric rates even more,” says Tyner. “That’s disgusting.”

Tyner says he will circulate a letter during the next legislature meeting asking his colleagues to formally oppose any rate hike. The PSC’s Sayre says the company’s proposed rate hikes are mid-range compared with other New York utility companies.

“It’s not a surprising amount,” says Sayre. “Now, that’s what they’re requesting. That’s not, of course, necessarily what they’re getting.”

He says the PSC will render a decision likely by the end of June 2018, when the current rate plan expires. Jen Metzger is director of Ulster County-based Citizens for Local Power, a party to the rate case. Metzger attended a Poughkeepsie hearing but plans to speak at the one in Kingston. Metzger has strong concerns about Central Hudson’s rate proposals and some of the spending items outlined in the company’s filings.

“We have concerns specifically about the rates and we have long been concerned that Central Hudson does have the highest fixed charges in the state, which are highly inequitable because no matter how little energy you use your charge is the same amount as everyone else. It consumes a huge, it’s a huge percentage of the bill and it’s particularly punishing for low-income customers because they often use much less energy and have to pay a disproportionately large percentage of their income toward the bill.”

Metzger wants Central Hudson to lower, not raise, by a dollar per month the fixed charge that Maserjian says his utility is proposing.

“Actually, it costs Central Hudson about $50 per residential customer in fixed charges each month,” says Maserjian. “So the $24 that we currently charge is really about half of what it costs in fixed charges to serve our customers.”

Maserjian argues that the fixed portion of the bill offers certainty to customers while reducing what he calls the more volatile portions of the statement. Metzger, Tyner and others take issue with many of Central Hudson’s other proposals, including an increase in the profit margin and allowing ratepayer-subsidized Fortis stock options for Central Hudson executives and employees. Canadian company Fortis acquired Central Hudson in 2013.  Maserjian notes that implementing a new low income bill discount program is part of the proposal. Town of Poughkeepsie resident Princess Forrest says the bills are too high.

“I don’t like when they turn off the lights because it’s hard to do homework for school, and you kind of need Internet sometimes for projects,” Forrest says. “And it’s also… you just need to see in the house, so it’s hard.”

Democratic Assemblyman Frank Skartados spoke at the Poughkeepsie hearing, voicing concerns about impacts to low-income customers. And Democratic Assemblyman Kevin Cahill urges residents, nonprofit employees and small business owners in his district to attend the Kingston hearings October 10 and let the PSC know how such an increase would impact their community. The PSC is also holding hearings in Newburgh October 16.