Assembly Energy Committee Passes Legislation Mandating an Immediate Review of Consumer Protections for Utility Shutoffs

May 24, 2011

Albany – Assemblymember Kevin Cahill (D – Ulster, Dutchess), Chair of the Assembly Energy Committee, announced today that the Committee voted to advance two pieces of legislation (A.7777 and A.7778) that would mandate an immediate and continuing review of existing consumer protections for utility service terminations and place a moratorium on winter shutoffs until reviews are completed. The measures were strongly backed by the AARP.

Recent reports of utility rate increases in various areas of New York State, combined with the consistently large number of residential utility service shutoffs, illustrate the need to review current consumer protections laws. In 2010, 321,995 households statewide had their electricity and/or gas shut off – an average of 36 households every hour of every day. More than 1.7 million households had their utilities terminated in New York State from 2005 - 2010.

“As New Yorkers are struggling to recover from the recession, the increases in utility terminations are troubling and must be scrutinized. With rates continuing to climb, a comprehensive review of our consumer protection laws is not only timely but absolutely necessary,” said Assemblymember Cahill.

“The high number of utility shutoffs in our state is unacceptable,” stated AARP New York State Director Lois Wagh Aronstein, “It is important for us to review current consumer protections and ensure they are adequate for the current economic climate. With high unemployment and people having to do more with less, this is a timely move especially given recent media reports of rate increases.”

“The number of households that had their electricity and gas shut off by New York utility companies last year suggests a major flaw in our existing consumer protection laws,” stated Assemblymember Aravella Simotas, sponsor of A.7777. “Until we conduct a comprehensive review of those policies, it is imperative that we prohibit utilities from terminating service during the winter, when access to heat and power is absolutely critical for young families and seniors alike.”

“It is totally unacceptable to have such a high percentage of utility customers being terminated during these challenging economic times,” stated Assemblymember Guillermo Linares, sponsor of A.7778. “I am particularly concerned with the most vulnerable and the elderly being affected by this situation during the winter months. We must take action to correct this situation immediately to require the Public Service Commission to submit a yearly report to the Governor, the Senate and the Assembly on existing consumer protection policy and activity addressing this concerning issue.”

“Most people think that utility shutoff issues are over by springtime, but that is not the case,” stated Executive Director Kathy Cloutier of Albany Community Action Partnership in Albany County. “In fact, many of our current energy-related customers are frustrated and angry because now that the winter is over and the high bills have accumulated, it’s become even tougher for these folks to get caught up. It’s easier if you’re a month behind versus four or five months. We all need to take a closer look at the current discretionary termination policies and advocate for some practical changes across the state; our low-income, elderly and disabled deserve to stay safe and warm in their homes without incurring impossible debt just to do so.”

“In Schenectady, we are seeing firsthand the devastating impact of these utility terminations on the working poor. People who have their utility service terminated face eviction and ultimately become homeless,” said Director of Housing and Community Services Louis Manuta at Schenectady Community Action Program, Inc. “Especially at this time of year, now that HEAP has closed, the line is out the door at our agency as low income people facing service terminations come to us for help. We are thankful that Chairman Cahill has taken the lead on this issue and recognizes that there is a great need to hold off on utility terminations pending the outcome of a state public service commission review and for the utility consumer protection statutes to be reviewed and enforced.”

In recent years, New York’s utility prices have been among the highest in the nation.

Electricity customers in New York pay, on average, $185 more annually than residents in other states. These rates are the third highest in the nation, second only to Hawaii and Connecticut.

The spring season is particularly harsh on residential ratepayers since most utilities use this time period to terminate service. From April to June 2010, New York utility companies terminated service to 125,716 customers.

An AARP survey conducted earlier this year revealed that 40% of New Yorkers age 50 and older have difficulty paying their monthly electric bills. Older New Yorkers are disproportionately affected by high utility rates because they spend a higher percentage of their overall household budgets on energy costs.