Blair Horner: Upstate NY's Utility Consumers May Take A Hit | WAMC

Blair Horner: Upstate NY's Utility Consumers May Take A Hit

Oct 5, 2020

Utility giant National Grid has proposed a rate hike of 4 percent more for electric and 6 percent more for natural gas service that, if approved, would start next July.  Those proposals would boost the utilities revenues by $100 million for electric delivery and $42 million for natural gas delivery.  The plan has been the subject of a series of public hearings organized by the New York State Public Service Commission and has generated widespread concern.

And the plan has generated significant opposition.  Consumer and environmental groups have voiced opposition arguing that a pandemic is no time to raise utility rates, and that National Grid needs to do more to address climate change.

The consumer argument was bolstered by an analysis released by U.S. Senator Chuck Schumer.  Schumer’s office argued that National Grid's upstate electric prices are already among the highest in the nation.  Schumer pointed to federal data showing that residential electricity rates in northern New York were 37 percent higher than the national average.  Commercial rates were 60 percent higher.  Schumer says National Grid is calling for the rate hike at the same time the company is reporting a 25 percent increase in pre-tax profits.

Schumer argued that the proposed hike comes on the heels of a $119 million rate increase that went into effect earlier this year - an increase that National Grid has deemed "inadequate."

The size of the hike, particularly during a pandemic, could devastate lower income consumers.  In National Grid’s service area, as of August 2020, over 235,000 New York households served by the company were more than 60 days behind on their utility bills.  Many of these New Yorkers would have been at risk of shut off now, but are protected by a state shut off moratorium law. 

Moreover, environmental groups have lined up against the plan, as well.  Their critique focuses on the fact that the increase would help fund National Grid’s plans for more natural gas pipelines, which they view as the wrong approach in the era of climate change. 

They have a point.

The planet is rapidly heating up and that is primarily the result of the burning of fossil fuels – coal, oil, and gas.  And the heating planet is causing catastrophic impacts.  For example, the ongoing wildfires in California have burned more than four million acres in 2020, over twice the previous record for any year and an area larger than Connecticut.

California has suffered five of its six largest wildfires in history this year as heat waves and dry-lightning hits coincided with drier conditions that climate scientists blame on global warming.

The world must move away from relying on power generated by fossil fuels.  No one is arguing that people should freeze in their homes or stop driving cars, but it is crystal clear that the world must stop investments in the expanded use of fossil fuels.  We can’t build out fossil fuel infrastructure and fight climate change at the same time.

Instead of proposing rate hikes that would support gas pipelines with a useful life well beyond New York’s 2050 goal of eliminating its greenhouse gas emissions,  National Grid should be focusing on efficiency measures and 21st century infrastructure, such as renewable wind, solar and geothermal energy; distributed resources and energy storage; and empowering consumers to further policy goals. 

When it comes to rate increases, this is not the time to further burden upstate residents with higher bills.  New York has been at the epicenter of the COVID-19 pandemic.  In addition to the once-in-a-century deaths and illnesses, the state’s economy has taken a staggering hit.  The economic dislocation has resulted in business failures, business interruptions and many New Yorkers furloughed or newly jobless.  The result is that many New Yorkers cannot pay their bills – even when it comes to essential services like heat and electric.

The Public Service Commission must reject the plan and instead have the company focus on maximizing low-income consumer protection and ensure that National Grid’s investments are focused on protecting the environment, not adding to the global warming catastrophe.

Blair Horner is executive director of the New York Public Interest Research Group.

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