State agency unlikely to agree to initial Central Hudson’s double-digit rates increase request, official says - The Daily Freeman

State agency unlikely to agree to initial Central Hudson’s double-digit rates increase request, official says - Daily Freeman

KINGSTON, N.Y. – The double-digit increase in electric and gas delivery rates proposed by Central Hudson Gas & Electric Corp. is likely to be dramatically decreased in a final approval granted by the Public Service Commission after its review of utility finances, according to a spokesman for the agency.

Central Hudson has asked for a one-year 16% jump in delivery rate for electricity and`19% for gas.

If approved by the Public Service Commission, the increased delivery rate plan would take effect on July 1, 2024. The current rate plan expires on June 30, 2024.

But James Denn, a PSC spokesman, said that normally, utilities will present initial proposals that wind up being much less in rate hikes when final approval is given.

“In New York, utility rate cases such as Central Hudson’s are scrutinized as part of the statutorily required 11-month review process to ensure customers and customers’ interests are fully protected,” Denn said in an email. “State regulators pour over the utility’s books to identify ways to cut costs. Nothing about a utility’s rate case is taken for granted or assumed.”

“For the major electric and gas utilities, the approved rates after this process are nearly always dramatically lower than what is requested, due entirely to this time-tested stakeholder review process,” Denn said.

Denn explained that during the process utility regulators “carefully examine the company’s rate filings and subject them to a rigorous investigative process with ample opportunity for public comment.”

“Interested persons may intervene and become parties in this rate case,” Denn said. Typically, Denn said, intervenors include industrial, commercial and other large-scale users; public interest groups; local municipal officials; dedicated advocacy groups; and members of the public.

“The review team typically develops opposing positions and recommendations for alternative approaches to the rate filing proposals,” Denn said. “Other interested groups will also file testimony and challenge the utility rate filings. Administrative Law Judges will be assigned to preside over the case, hear all the evidence/arguments and provide recommendations to the PSC.”

Central Hudson spokesman Joseph Jenkins said Tuesday that the company is prepared for the review.

“This filing is our initial proposal, which is for one year only,” Jenkins said.

“The multi-year schedules come about as part of the rate case’s negotiation process (generally several months from now) in the Joint Proposal,” Jenkins added.

In December 2021, the PSC approved a plan that dropped electricity delivery rates by 0.25% for customers during the first year of the new rates, increased them by 1.3% the second year and did the same by 1.4% the third year.

Central Hudson delivery rates for natural gas approved by the PSC in December, 2021, elevated them by 1.2% the first year, 1.6% the second year and 1.1% the third.

At the time, the PSC said that Central Hudson initially proposed delivery rates that were designed to increase revenue by about $32.8 million per year for electricity and $14.4 million per year for natural gas. Those proposals would have driven up customer rates for electricity delivery by 6.2% and gas delivery by 8%, much less than what this week’s initial proposal indicates.

Central Hudson on Monday announced it would seek double-digit rate hikes, in part, to pay for the cost of implementing an agreement it reached last week ago with the state Public Service Commission to expedite the transition to monthly meter readers.

The company has said it would voluntarily end its bi-monthly estimated billing process. The New York state Legislature failed to pass legislation to force the utility to do it.

Still, regional state lawmakers, both Democrats and Republicans, remain angered at the company.

Senator Michelle Hinchey, D-Saugerties, who steered passage of the end of bi-monthly estimated billing legislation through the Senate but it failed to pass the Assembly, said that Central Hudson should not receive a rate increase. Hinchey represents the 46th Senate District.

“Central Hudson should not receive a rate increase — especially not at a time when the PSC is actively investigating the company for improper billing,” Hinchey said in an email. “That’s why my office is working with the Public Utility Law Project on next steps to best advocate for an outcome that supports ratepayers, and we will communicate our opinion — supported by our Constituent Services casework — directly with the PSC, as we have done for all other rate hike requests.”

Senator Peter Oberacker, R- Schenevus, agreed.

“Central Hudson ratepayers have been put through the wringer for the past year and now they are being told their rates are going up – it’s a disgraceful move that cannot be tolerated,” said Oberacker, who represents the 51st Senate District, which includes parts of Ulster County. “I am calling on the Public Service Commission to categorically reject the utility’s request for an increase. Additionally, it is past time for Central Hudson to fully correct their ongoing billing fiasco that has been a major hardship for so many of my constituents.”

Assemblywoman Sarahana Shrestha, D-Esopus, said that much in the way of regulation needs to be accomplished.

“The state has the authority to deny Central Hudson rate increases, and that’s what our office will be pushing for it to do,” Shrestha said in an email. “But we also need legislative solutions for a fundamentally broken rate structure where the cost of almost everything these corporate monopolies do is passed onto ratepayers.”

“There’s an inherent conflict in who utilities are supposed to serve—the public—and who they actually serve—the shareholders,” Shrestha said.

Shrestha said that “there’s legislation I’m pushing for in the near-term, such as the NY Heat Act, which caps utility bills at 6% of income and addresses the issue of ratepayers paying for a dying gas infrastructure, and another bill (A07880A) that prohibits utilities from using ratepayer money for several political activities such as making political donations.”

These are in addition to two bills Shrestha introduced to prohibit utilities from charging late fees or terminating services while undergoing investigation; and to adjust outdated utility penalties.

Shrestha represents the 103rd Assembly District.

Assemblyman Jonathan Jacobson, D-City of Newburgh, said Central Hudson “is mistaken if it expects to be rewarded for nearly two years of untimely and inaccurate billing.”

Jacobson represents the 104th Assembly District.