In the year ending August 31, 2014, Central Hudson Gas & Electric sent more than 300,000 final termination notices to its residential customers. Four months ago, the Utility Project spotlighted “the basic fact that electric and gas utility service [is] not affordable to many residential customers of Central Hudson Gas & Electric, as shown by the utility’s reports to the Public Service Commission indicating that as of August 31, 2014, 23,259 CHG&E customers were more than 60 days late in paying their bills.” See, MANY CENTRAL HUDSON CUSTOMERS IN DEBT, FACING HARDSHIPS, LATE CHARGES, SHUTOFF THREATS, AND SHUTOFFS OF ESSENTIAL UTILITY SERVICE, Nov. 14, 2014.
Now Central Hudson is in eleven-month electric and gas rate cases to review rate increases it filed last year, which were suspended by the PSC until it determines the just and reasonable rates. Despite the fact that new rate increases for essential utility service will inflict more economic hardship upon Central Hudson’s customers, the PSC, Central Hudson and several parties to the case have submitted a “Joint Proposal” and Appendices asking the PSC to approve a three year settlement that will do just that.
Over the three years of the proposed plan beginning July 11, 2015, customers would pay or credit the company $116.237 million more than customers would pay or credit under current rates. The summary filed by the proponents of the Joint Proposal indicates that the base electric rates will go up in three annual steps, reaching a level that is $55 million/year higher at the beginning of the third year. This means electric delivery rates would increase by more than 10% over the three years, even if one-time accounting credits owed to customers are used to mitigate the impacts temporarily. Bear in mind this is only for the “delivery” portion of rates. The energy supply portion could also go up.
Under the Joint Proposal provisions for gas rates, the rates would be $12.2 million/year higher at the beginning of the third year, and over the three year period customers would pay or credit the company with $22.65 million more than under current rates.
In its Comments on the proposed settlement, the Utility Project has put forward common sense alternatives that would make bills more affordable and reform rate design and pricing to encourage more efficiency and conservation..
The contrast is clear. Central Hudson’s proposals would:
- dis-incentivize conservation by rewarding the heaviest users of energy with the cheapest rates;
- inflict the largest increase upon low- and fixed-income people, by raising yet again the largest basic service charges of any New York State utility (as of January 1, 2013, Central Hudson’s electric basic service charge was $24, or 30% higher than average; and Central Hudson’s gas minimum charge was $23, or 29% higher than average); and
- ignore the continued erosion of its residential customers’ economic health by refusing to switch from its current low-/fixed-income rate program to one that could provide real assistance for consumers who can’t afford to pay their energy bills, which is the case for many residents of Central Hudson’s service area.
The Utility Project’s proposals, on the other hand, suggest changing Central Hudson’s rate design in ways that promote conservation and lower New York’s greenhouse gas footprint while simultaneously replacing its current low-/fixed-income rate program with one that provides robust relief to their economically suffering customers.
We believe the proposals we submitted will serve the public interest, unlike the measures set forth in Central Hudson.
For further analysis on the issue of affordability by the Utility Project, see:
- ELECTRIC BILL SURCHARGE REFORM PROPOSALS TO COLLECT AND SPEND BILLIONS DO NOT ADDRESS AFFORDABLE SERVICE TO LOW INCOME CUSTOMERS, NYUP Update, November 12, 2014.
- CATCHING UP IS HARD TO DO – NEW YORK’S UTILITY CUSTOMERS AND THE GREAT RECESSION, NYUP Update, Feb. 3, 2014;
- UTILITY PROJECT URGES PSC REFORMS TO REDUCE HARM TO UTILITY CUSTOMERS FROM PRICE SPIKES, NYUP Update May 14, 2014