Gas and electricity rates will go up for about 380,000 Central Hudson customers under a new agreement between the utility and the state Public Service Commission. But consumer advocates are cheering a provision in the deal that they say will create incentives for energy efficiency and reform a pricing plan that places an unfair burden on the poor and elderly.
As a government-regulated monopoly, Central Hudson must seek approval and provide justification anytime it seeks to raise rates. The process is overseen by the Public Service Commission, while consumer groups and other interested parties may provide input. That process has been ongoing since June 2017 when Central Hudson announced that it would seek a rate hike to finance infrastructure improvements. On April 18, the utility and the PSC announced a “joint proposal” for the new rate plan. The proposal will undergo a 30-day public comment period before the PSC holds an up or down vote on the plan. If approved, the new rates will go into effect starting in July.
Under the terms of the proposal the rate increase would be phased in over three years. By the end of that period, average residential electric rates would rise by 5.45 percent or about 24 cents per day. That figure is more than the 3.7 percent rate hike sought by Central Hudson. But the impact will be offset by a reduction in a fixed monthly service fee charged to all accounts regardless of their energy consumption. That fee will drop from $24 per month to $19.50. The reduction in the service fee was sought by consumer groups who argued that the fee, the highest in the state, unfairly burdened older and low income customers who use less electricity proportionally than other users.
Jen Metzger, a Rosendale town council member and candidate for state Senate, is a leader of Citizens for Local Power, an advocacy group that sat in on the talks between Central Hudson and the PSC. Metzger said the group pushed for the reduction in the service fee because of its unfairness to consumers who use less power and because the higher fee provided less incentive for users to invest in energy efficiency. Metzger said that the fee reduction (which, like the higher rates will be phased in over three years) brings the cost below that paid by utility consumers in Orange and Rockland counties.
“We did not sign on to the joint proposal, because there are still some areas where we have concerns,” said Metzger. “But there are elements of this rate plan that we are very pleased with.”
Central Hudson officials say that the rate hike will offset the costs of a series of planned improvements and upgrades to customer service. The proposed services include replacement of aging poles and wires with new, more weather-resistant equipment investing in new technology to reduce the frequency and duration of power outages. The rate hike will also fund replacement or modernization of existing electrical and gas substations.
“A lot of the cost is driven by replacing aging infrastructure,” said Central Hudson spokesman John Maserjian. “Some of it was installed in the 1930s and ’40s and it needs to be replaced.”
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