Updates from the Committee on Energy

Central Hudson Rate Rehearing Letter
June 23, 2010

Mindy A. Bockstein, Chair
New York State Consumer Protection Board
5 Empire State Plaza, Suite 2101
Albany, New York 12223

Dear Chair Bockstein:

I write regarding the Public Service Commissionís (PSC) decision to authorize the increase in gas and electric delivery rates for customers of Central Hudson by over eleven and fifteen percent respectively for electric and gas over the next three years. This ruling is unwarranted and creates an unduly excessive burden on the residential and small business ratepayers served by the utility. I urge the Consumer Protection Board (CPB) to formally request a rehearing of the case by the PSC.

The rate increases included in this plan are clearly not in the public interest. With so many Central Hudson customers struggling to get by, I find it difficult to understand the Public Service Commissionís justification for giving the utility three years of economic security when they are already making a considerable profit from the rate hike approved just last year. Under your leadership, the Utility Intervention Unit has been a strong defender of ratepayers and I urge you to continue that tradition by petitioning to reopen the process.

This decision provides no safety or security for the average customer and raises many questions. While I do not object to he Commission approving costs that are essential to maintaining service integrity. Allowing the utility to earn a minimum ten percent rate of return is well above what most investors could reasonably expect in today's economic climate. Given the economy and the financial struggles we face in the Hudson Valley, the PSC should have completely rejected those charges that are intended to overflow the pockets of Central Hudsonís shareholders.

As you know, the rate hearing also involved the presentation of inaccurate data used to calculate financing the arrears forgiveness efforts, known as the Enhanced Powerful Opportunities Program (EPOP). This raised numerous questions regarding the validity of the process and led the CPB to withdraw its support of EPOP in the then pending Joint Proposal. In fact, the CPB was so concerned about this issue that it wrote in a Post Hearing Brief dated March 24th, 2010:

Due Process was a casualty of Central Hudsonís Conduct. Central Hudson nullified the CPBís participation in negotiations by encouraging reliance on data unconnected with reality.

The circumstances surrounding the future of the EPOP are still unresolved as of this date. That issue is another that standing alone would warrant a petition from the CPB.

This rate hike was founded on a joint proposal negotiated in private and without any public input. Only after an agreement between the utility, the PSC and the large corporate and industrial users comprising the Multiple Intervenors, was the public permitted to comment. Multiple Intervenors, who already have great influence over the rate structure and were not bound by the Joint Proposal, should have had very little to say about the rates and priorities this plan would impose on everyone else. A proposal arrived at in a backroom deal involving powerful interests does a tremendous disservice to the process and the idea of the final judgment being in the public interest

The rate increase will add to the high energy cost burdens on Central Hudsonís customers, making it even more difficult for them to make ends meet in the future. I strongly urge the CPB to pursue a rehearing of this proceeding.

As always, I appreciate your cooperation and look forward to your response.

Sincerely,
Kevin A. Cahill
Member of Assembly

Cc: Tariq Niazi, Director of Utility Intervention