New York’s Draft Energy Plan, issued January 7, 2014 by the New York State Energy Planning Board, calls for improved energy affordability for New York’s energy consumers, who pay some of the nation’s highest rates for electricity. Here is what it says:
Improving Energy Affordability
• Keep New York residential customer electric bills as a percentage
of household income at or below the national average (% of median
• Reduce the percentage of household income devoted to energy bills for
low-income New Yorkers (% of low to moderate household income)
This is welcome news indeed for New Yorkers struggling to pay their electric and gas bills. See Utility Project Update, CATCHING UP IS HARD TO DO – NEW YORK’S UTILITY CUSTOMERS AND THE GREAT RECESSION.
It remains to be seen whether needed measures to achieve energy affordability for low-income households will actually be adopted soon by the state legislature or Public Service Commission. Back in the 1970’s, the New York PSC rejected low-income rates, while other states, including California, adopted them. The New York PSC’s reluctance to adopt low-income rates was still evident nearly two decades later, when it made the decisions and agreements with utilities regarding electric industry restructuring in the mid 1990’s. A 1994 draft “principle” tentatively addressed possible “bill shock” to vulnerable small customers who might lose under restructuring, and initially contained an express affordability principle:
“The Commission should strive to minimize “bill shock” for any class of customers. A basic level of reasonably affordable service must be maintained, especially for people living in poverty.”
This principle, vigorously urged by the Utility Project in the proceedings that led to restructuring, would have been a significant advance for low income consumers, because unlike California and other states, the New York PSC still had not fully embraced the concept of affordable rates for low income energy users. The express affordability goal for low-income customers, however, eventually was rejected and was not adopted by the New York Commission when it issued its final order on principles for restructuring:
This explicit recognition of affordability concerns was eliminated with a change of NYPSC administration in 1995. The NYPSC in Opinion 95-7 deleted the references in the draft to “affordable service” and “people living in poverty,” with the following explanation: This wording avoids any potentially troublesome need to decide whether electric service is actually “affordable” for particular customers and accurately reflects our mandate to ensure electric service at just and reasonable rates. It does not, however, diminish in any way our concern to ensure adequate protections for customers who are unable to afford basic electric service. New York has a distinguished history of ensuring such protection for those who may face financial difficulties, and this will continue regardless of industry structure.
In this passage, the PSC left unclear who would be responsible for the “troublesome” issue of affordability of electric service if the Commission did not address it. The utilities had suggested broadened federal and state taxpayer funded programs or “energy stamps,” analogous to the Food Stamp program, to deal with hardship. During an era of reducing taxes and ending such transfer programs, this was hardly a viable solution. General optimism that competition would bring greater efficiency and lower prices prevailed. **** [S]harp rate increases after deregulation led some utilities and the NYPSC to revisit the issue of affordability and take tentative steps to mitigate some of the hardship for low income consumers.
In the ensuing years, the investor-owned gas and electric utilities gradually adopted low-income rates in piecemeal steps, with PSC approval in rate case settlements. There are no low-income rates for LIPA customers. The current low-income rates and programs vary in scope, eligibility requirements, percentage of low-income customers enrolled, and amount of rate reductions. In contrast, California provides a statewide 20% CARE rate reduction for low-income customers, at times exempts CARE customers from certain charges, and has an explicit goal to enroll all eligible customers. The California legislature also created a Low-Income Oversight Board to oversee affordability of service and monitor regulatory actions affecting low-income customers.
The lack of adequate low-income rates and service programs for low-income customers causes great hardship to many New York households. This been among the chief reasons the Utility Project opposes approval of the pending rate deals with National Fuel Gas Distribution Company and Con Edison. See UTILITY PROJECT OPPOSES PROPOSED CON EDISON ELECTRIC AND GAS RATE CASE SETTLEMENT; PSC SEEKS PUBLIC COMMENT.
Public Comments are invited on the draft State Energy Plan until March 31, 2014. Comments can be submitted online or by mail to:
2014 Draft State Energy Plan Comments
17 Columbia Circle
Albany, NY 12203-6399
The State Energy Planning Board will also be holding public hearings on the Draft Energy Plan. According to the Notice, “Each participant from the public will be given five minutes to address the New York State Energy Planning Board. No formal presentations will be allowed, but participants may leave written supporting documents. There is also no formal Question-and-Answer format although Board Members may ask informal questions based on the provided testimony. The hearings will be professionally recorded and transcribed, and the proceedings will be incorporated in the official record of the Plan and posted on the State Energy Plan website.”
As detailed in the State Register Notice (dated January 29, 2014), the New York State Energy Planning Board hereby gives notice of the following public hearings:
February 18, 2014 – 10:00 a.m., Albany
Albany College of Nanoscale Science and Engineering
255 Fuller Rd
February 19, 2014 – 3:00 p.m., Brooklyn
Student Center, 6th Floor
Campus Road & East 27th St.
February 20, 2014 – 10:00 a.m., Manhattan
John Jay College
524 West 59 Street (between 10th and 11th Avenues)
New York, NY
February 25, 2014 – 10:00 a.m., Buffalo
Center for Tomorrow
Flint & Service Center Roads
March 3, 2014 – 1:00 p.m., Long Island
Little Theater at Roosevelt Hall
March 6, 2014 – 11:00 a.m., Syracuse
Syracuse SUNY College of Environment
Science and Forestry (ESF)
1 Forestry Drive
The State Energy Planning Board website has further information about the planning process and the draft plan.