The utility initially proposed a rate plan that would increase its revenue by $181 million, hiking delivery rates for electric and gas by 16 and 19 percent, respectively. Instead, the PSC has approved a roughly $79 million rate plan, with a 5.5 percent hike for electric delivery, and a 7.3 percent hike for gas delivery.
In sharing his thoughts on the case, Commissioner Rory Christian addressed a group protesting Central Hudson from the back of the room.
“I’m certain some of you view the rate case as a reward, giving credit for good behavior. That is not the purpose of a rate case," said Christian. "The purpose of a rate case is to ensure the reliability of the system.”
Central Hudson is still trying to rebuild trust with customers and lawmakers after its transition to a new billing system in 2021 led to the inaccurate billing of hundreds of customers. In June, the utility agreed to absorb the costs of the fiasco in a $65 million settlement with the PSC. Earlier this year, State Senator Michelle Hinchey and Assemblymember Sarahana Shrestha, both Democrats, went as far as to introduce a bill that would allow the state to launch a public takeover of Central Hudson. It didn’t pass.
In public hearings on the rate case, Democratic State Senator James Skoufis called Central Hudson’s request an “insult,” and accused the utility of employing a common negotiation tactic: requesting exorbitantly high rates before settling for the number it really wants. He urged the PSC to reject Central Hudson’s request outright.
"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,'" he warned. "They deserve not one red cent of a rate hike.”
Indeed, Congressman Pat Ryan, a Democrat from the 18th District, has called the PSC’s ruling “completely unacceptable.” Democratic Assemblyman Jonathan Jacobson of the 104th District said in part: “It is clear that the entire rate-setting formula must be reformed.”
So, what does this mean for customers? Starting in August and running through June 2025, Central Hudson says the typical electric customer will see a total bill increase of $12.65 a month. The typical gas customer, meanwhile, will see an increase of $12.25 a month.
Central Hudson has said it needs more revenue to improve its infrastructure, comply with New York’s climate laws, upgrade customer service, and improve its storm response. Spokesman Joe Jenkins says the limited rate hike will still allow the utility to hire and replace infrastructure to meet its legal obligations, but it will need to cut some of its loftier goals.
“We were looking to add some additional positions in customer-facing areas and other key areas of the business, where we’ll still be able to add jobs and add employees to meet those needs, but it wasn’t at the number that we originally requested," says Jenkins. "That’s where we saw the largest cuts came from, was the requested headcount.”
Jenkins says none of the revenue generated by the hike will go toward covering the recent settlement.
Laurie Wheelock, executive director and counsel for the Public Utility Law Project (PULP) — one of multiple groups that opposed Central Hudson in the rate case — says any increase will be hard on customers. Wheelock says New Yorkers are being battered by both inflation and increased energy use driven by extreme weather. She says the state’s emergency Home Energy Assistance Program has run out of funds more than a month early, and stopped taking applications as of Monday.
“We definitely encourage customers who are low-income to contact their local and county department of social services today. There are other programs as well, emergency energy assistance through the county," says Wheelock. "And for Central Hudson customers who are low-income, you should definitely check your bill and talk to the company to see if you’re in the Energy Affordability Program, or EAP."
Wheelock also warns that, unlike Central Hudson’s last rate plan, which phased in increases over a course of three years, this latest plan is less than a year long. So, it’s possible the utility will request another rate hike soon, as these cases typically take about a year for the PSC to get through.
“We're looking at the company and we’re saying, ‘OK, you did get this increase. You get to move forward now. You get to pursue those labor costs and these additional capital costs — but honestly, that’s it,'" says Wheelock. "You should give your customers time to bounce back. Do not come back. Let’s see how things go, and let’s just let the healing begin, now.”
Central Hudson has said it intends to propose a new plan for summer 2025 and beyond in the near future.
