Updates from the Committee on Energy

Cahill Calls for Central Hudson Rate Case Rehearing
June 24, 2010

Albany – Assemblymember Kevin Cahill (D - Ulster, Dutchess), wrote the New York State Consumer Protection Board urging them to petition the Public Service Commission for a rehearing of the Central Hudson rate case approved last week. The Public Service Commission’s decision to raise gas and electric delivery rates for customers of Central Hudson by over eleven and fifteen percent for electric and gas, respectively, over the next three years comes at the expense of residential and small business ratepayers.

“The rate increases included in this plan are excessive and unduly burdensome. With so many Central Hudson customers struggling to get by on a month to month basis, I don’t see how the Public Service Commission can justify giving Central Hudson shareholders three years of economic security when they are already making considerable profits from the rate hike approved just last year,” said Assemblymember Cahill. “This decision provides no safety or security for the average customer and I am calling on the Consumer Protection Board to petition for a rehearing.”

The letter noted that The Commission should have only approved costs that are essential to maintaining service integrity while rejecting those that are designed to overflow the pockets of Central Hudson’s shareholders. In particular, Assemblymember Cahill questioned why Central Hudson investors should be allowed to earn a minimum ten percent rate of return, which is well above what most investors could reasonably expect in today's economic climate.

The approved rate plan involved the presentation of inaccurate data during the hearings process which was used to calculate financing for the low-income Enhanced Powerful Opportunities Program (EPOP). This raised numerous concerns regarding the validity of the process and led the CPB to withdraw its support of EPOP in the then pending Joint Proposal.

“The circumstances surrounding the future of the EPOP are still unresolved. This issue alone is enough to warrant a petition for a rehearing,” said Assemblymember Cahill. “The rate increase will add to the high energy cost burdens on Central Hudson’s customers, many of whom are already threatened with losing services and are having difficulties making ends meet. “

The approved hike was founded on a joint proposal initially formed without any public input in the development of that plan. Only after the negotiations between the utility, the PSC and the large corporate and industrial user comprising the Multiple Intervenors, was the public permitted to comment. Assemblymember Cahill is pushing for intervenor funding (A.8722 D) to give the public more of a voice in rate cases.

“Backroom deals are never in the public interest. Ratepayers should have been involved every step of the way. Multiple Intervenors already have too much influence over the rate structure and they are not bound by the joint proposal. Yet, they had a lot to say about the rates and priorities this plan would impose on everyone else,” said Assemblymember Cahill. “To balance the scales, I am pushing a bill to require utilities to fund intervenors who would provide the know how to defend the public interest in rate proceedings.”