Utility Project Urges PSC Reforms to Reduce Harm to Utility Customers from Price Spikes

At a May 15, 2014 New York PSC Technical Conference on Winter Energy Pricing and Supply,  the Utility Project pointed out that regulators have adopted rate setting mechanisms that rely too much on gas and electric spot markets, thus unduly exposing customers to spiking rates.  The Utility Project made the following recommendations to address the regulatory issues and reduce customer hardship in the future:

Low Income Rates. Provide larger bill reductions, and expand eligibility to include Medicaid recipients for all utility low income and Lifeline programs, and establish a goal to enroll all eligible low-income customers in the correct rate class.

Universal Service Fund. Collect a universal service charge on all NYISO transactions to equitably fund increased low income assistance, because continuous service at reasonable prices to the poor is in the interest of all customers and should be supported by all customers.

Equitable Use of Other Funds for Low-Income Customers. Require SBC and RGGI funds collected from low-income customers to be used for their benefit to reduce usage and become more energy efficient.

Continuous service. Create performance metrics to reduce service terminations for bill collection purposes, to promote the statutory goal of continuous residential service established in the Home Energy Fair Practices Act, PSL §§ 30, et seq..

Same Day Reconnections.  Require all utilities to implement plans for same day reconnection of customers shut off for bill collection purposes when they pay or make satisfactory arrangements to pay by 5 PM.  See  Con Edison Now Providing Same Day Reconnection Of Service To Electric Customers Shut Off For Bill Collection Purposes .This would reduce the time when service is off and reduce the risk of tragedies from use of less safe sources of energy.  See Candle Fires: A Symptom of “Rolling Blackouts” Affecting Low Income Households.

Customer assistance in accessing other bill payment aid. Incentivize utilities to help customers obtain SSL 131-s assistance and urge reform of 131-s program restrictions on aid to reduce shutoffs of utility customers unable to pay.

Default service supply portfolio and fixed rate option. Require a supply portfolio approach for residential and small commercial default service and reduce reliance on spot price purchasing, and a reasonable fixed rate option.  See Customer Groups Urge NY PSC To Restore Fixed RatesPSC Replaces NYSEG Fixed Default Service Rates With Variable Rate Option; Excelsior! Con Edison Residential Rates Spike (Again); See NY City Wholesale Electricity Prices May Rise 89% Due To Market Design And Higher Natural Gas Prices Con Edison: The “Rate Freeze” That Isn’t!

Long term contracts for electricity and gas. Encourage longer term electric supply contracts not indexed to NYISO or spot gas prices, and encourage longer than one year purchasing ahead for residential gas customers. Incentivize utilities to seek and if necessary litigate for just and reasonable contracts at less than ISO prices.

Gas Procurement Practices of Generators. Determine if generator purchasing and ISO bidding practices are in the public interest and take appropriate action if some generators lack credit to buy gas at other than next day spot prices.

Market gaming. Examine gas and electric markets for  gaming, physical and economic withholding, or anomalous pricing and take appropriate action at FERC, the courts, and exercise public interest jurisdiction over lightly regulated wholesale utilities. Incentivize utilities to seek refunds of wholesale overcharges for benefit of retail default service customers.

Constellation Disgorgement Fund for wholesale power advocacy. FERC approved $1 million/yr for 10 years in Oct. 2012 for consumer advocacy on wholesale issues, but the program is not implemented.  See FERC Urged Not To Go Overboard On Wholesale Electricity Capacity Markets – New York Needs Independent State Consumer Advocate.

Independent Consumer Advocate and Intervenor Funding. Support legislative initiatives to create well resourced independent residential utility consumer advocacy and provide funding for intervenor representation of consumers.  See Moreland Commission Recommends Stronger Utility Consumer AdvocacyUtilities Attack Creation Of Independent State Utility Consumer Advocate OfficeNY Budget Adopted Without Reform Of State Utility Consumer Advocate Function.

The Utility Project’s presentation at the technical conference showed how the Commission’s policies to destabilize residential rates have led to large numbers of customers falling behind in paying bills, who are  facing hardship, threats of service termination and actual termination.

Gerald A. Norlander

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