Central Hudson submitted a one-year plan to the New York Public Service Commission that would increase delivery rates for electric and gas by 16 and 19 percent, respectively, beginning in July 2024. The utility estimates that would mean an extra dollar per day for the average electric customer, and an extra dollar per day for the average gas customer.
Ed Kennedy of Newburgh was one of more than 50 Hudson Valley residents who turned out for the PSC’s public hearing on the matter at SUNY Orange. Like many, he was there to oppose the rate hike request and to air his frustrations: the utility is still dealing with the fallout from a billing fiasco caused by its transition to a new billing system in 2021. Kennedy says, at one point, his credit card was wrongfully charged $2,000.
“When you screw up, you take a pay cut. This is ridiculous," declares Kennedy. "And you politicians, you should be taking their license away and giving it to Orange & Rockland, or giving it to somebody else. No more Central Hudson!"
Central Hudson maintains that the majority of its billing errors have been cleared up, although local lawmakers say they are still receiving complaints from constituents. Earlier this year, the utility agreed to hire an independent monitor to review whether efforts to fix its new billing system have been effective.
As for the rate hike, Central Hudson Spokesman Joe Jenkins says the utility needs to raise prices in order to replace its aging infrastructure and comply with New York’s new climate laws. Jenkins says about 20 percent of the utility’s infrastructure has passed its useful life, all while the company is also trying to prepare for a switch from bi-monthly to monthly meter readings and grow its workforce.
"We've all seen that severe weather has become more frequent in the Hudson Valley," Jenkins explains. "And as a result, we've had to respond to more of that severe weather — and that means providing personnel and resources to address these weather events. That includes mutual aid and contract line workers."
That’s an explanation that probably won’t fly with the customers at the public hearing, like Kimberly Ashcraft.
"Take a loan if you need money," she says. "As consumers, we need money? We mortgage our homes, take loans. You need money? Don't take it from your customers, get a mortgage like every other person and every other business does."
Central Hudson’s net income for 2022 was $78 million, according to an annual report. Jenkins says those earnings were re-invested into the utility’s infrastructure, along with additional investments from its Canadian parent company, Fortis. Jenkins adds Central Hudson has not provided dividend payments from these earnings to Fortis or to shareholders for "several years.” Fortis’ net worth is over $19 billion as of October 2023.
When it comes to calculating a utility bill, Jenkins explains there are three main components: the supply price, or the cost of the energy itself; the delivery price, meaning the cost of the utility infrastructure that gets that power to your home; and taxes. Jenkins says the supply price fluctuates with the energy market — and New York was one of the first states to deregulate its energy market, so residents have a little more choice in where they buy their energy, be it from a power plant or a solar program. Jenkins acknowledges this price has swung wildly over the past few years, but he maintains Central Hudson doesn’t see a dime of it. Central Hudson doesn’t significantly generate its own power — rather, it buys electricity and gas from other providers, and passes that cost on to customers.
How Central Hudson makes its money, then, is a little complicated.
"Profit for utility companies essentially is derived from those delivery charges," he notes. "But our profit is really based off the return on equity we get for the investments we put into the system, so we are motivated and inclined to continue to make investments and improvements on our system, so that we can provide safer and more reliable service to our customers."
The PSC last approved a rate plan for Central Hudson in 2021, which set a net increase in delivery rate for electric and gas over the course of three years. Jenkins says the current delivery rate sits at just over 10 cents per kilowatt hour for the typical electric customer.
But delivery is not something customers can shop around on.
Michele Basch owns The Wherehouse pub and grill in Newburgh with her husband, David Brown. She says her residential electric bill has nearly doubled since 2020, and the restaurant’s monthly electric bill has gone from a peak of $1,500 to $2,000 to an average of $3,500. Basch says she’s tried signing up for clean energy programs to lower her energy bill, but she feels it doesn’t matter if she’s still stuck with Central Hudson’s power and gas lines in the end.
“I sell burgers. Real simple, American fare. If I were to go up 30 percent on my hamburgers, you could come in and say ‘Oh it’s so good, I don’t mind!’" laughs Basch. "But you could also say, ‘What, are you crazy?’ and go to the next place and have a burger. We do not have that choice.”
Despite impassioned pleas from the likes of Ed Kennedy, there are no serious efforts to break up New York’s utilities. In response to Central Hudson’s billing errors, however, the state legislature sent a bill to Governor Kathy Hochul’s desk that would ban utilities from back-billing customers if they are more than two months late in delivering an invoice. State Assemblyman Jonathan Jacobson of the 104th District has also sponsored legislation, with State Senator Michelle Hinchey, that would restrict utilities from relying on estimated billing.
Multiple lawmakers were on hand at the hearing to oppose the rate hike, including Jacobson, State Senator Rob Rolison, and State Senator James Skoufis. Skoufis, a Democrat from the 42nd District, called the request “insulting,” adding that he’s still receiving complaints of billing mishaps from constituents. While he likened the PSC’s rate case process to a “game,” where utilities often request exorbitant hikes to settle for the number they really want — his message to the PSC was simple: don’t play.
"A knocked-down rate hike, no one's gonna be celebrating. No elected official, no one in the public [is going to say], 'Oh, thank you Public Service Commission, for only limiting [the rate increase] to 'X,'" said Skoufis. "They deserve not one red cent of a rate hike."
Many at the hearing called on the PSC to demand a rate decrease for customers’ pain and suffering. Alexis Danzig of Saugerties says she appealed to the PSC in June when, over the course of three months, she received back-to-back bills from Central Hudson totaling $160, $1,500, and $116. She says the PSC ultimately sent her a typo-ridden letter that mistakenly referred to Central Hudson as National Grid before telling her to pay up.
Even Newburgh Mayor Torrence Harvey made headlines last year, when he received an erroneous bill totaling more than $700,000.
"For my home, which is a ranch house, a three-bedroom house on a third of an acre in the city of Newburgh," Harvey explains. "Almost put me in cardiac arrest, and that's the God's honest truth. I almost had a heart attack."
Billing issues aside, many noted that Hudson Valley residents are feeling the squeeze amid high inflation. Newburgh resident Leilani Johnson says, as a disabled person living on a fixed income, she’s already struggling to get by. If the PSC were to approve a rate hike, she wonders whether customers will be forced to choose between paying rent and paying their utility bill.
"We want to know what’s gonna happen for real, and not just a lot of lip service, because this is very serious. This is really life and death," says Johnson. "Because if you can’t pay your bills, what happens?"
The PSC says the rate case is still in its early days. Stakeholders can submit comments on the PSC website.
