The Saugerties Town Board voted at its regular meeting on Wednesday, May 4 to authorize Supervisor Fred Costello to contact New York State Attorney General Letitia James and the Public Service Commission, asking them to block Columbia from raising rates, in breach of its contract with a group of area towns.
Both the Town of Saugerties and Columbia Power signed an agreement to maintain a stable price for electrical power, Supervisor Costello said. By joining a Community Choice Aggregation group, the Town saw an advantage in having a stable rate for electricity. As the price on the open market increased, the stable rate looked better.
“Many small consumers did not benefit from the deregulation of the energy market,” Costello said. The public Service Commission, recognizing the problem, set up a system under which communities could “form a buying bloc to secure a contract as a hedge against fluctuations in the cost of energy.” Communities could negotiate a better rate and in 2021, Saugerties joined a ten-town consortium to do just that. Joule Energy oversaw the group power agreement and worked with the municipalities to negotiate a lower rate than the going rate through Central Hudson. “Residents who are part of this agreement, even those who didn’t join and don’t know they are part of the agreement, have been saving five cents a kilowatt on their energy bills.”
The Town contracted with Columbia Energy to buy electricity at a fixed rate, but Columbia Energy has said it intends to sell the contract, Costello said. “They’re speculating that the contract could be worth hundreds-of-millions of dollars to buyers of energy supply. “They could not make this kind of money by continuing to supply energy to Saugerties at the contract price. Saugerties, along with the other municipalities that are part of the contract working with Joule, who is our administrator, are doing all they can to prevent them from taking that action,” said Costello. “We signed a contract with them. We did it in good faith, and the residents who are part of it should continue to receive benefits and they [Columbia] should not have the power to sell that power.”
The town is taking the additional action of asking the Attorney General and the Public Service Commission “to support our effort to protect the agreement that we signed, and that they signed as well, and we’re hopeful that this will stop this process in its tracks,” Costello said. The town is not ruling out further action in the future, should it be necessary.