Joining their colleagues on the Town Council, Village of New Paltz trustees have agreed to add the Village as a plaintiff in a suit against Columbia Utilities, after leaders of that company signaled a desire to pull out of an agreement to provide flat-rate renewable electricity two years ahead of schedule. If the cancellation goes ahead, New Paltz ratepayers would be among about 25,000 in the region who would suddenly be subject to rising variable rates.
Created during the Cuomo administration, “community choice aggregation” is a word salad that describes the authority of large numbers of people to negotiate for better deals on electricity. While the driver for this scheme was to reduce carbon emissions, a side benefit is that these flat-rate deals can be cheaper than the variable rate paid for electricity purchased on the open market. To beef up the benefits, CCAs are opt-out for affected residents; ratepyers get numerous letters explaining the process of opting out when it’s adopted in a community, and every time a new contract is approved. Leaders of New Paltz, Saugerties and several other communities joined a consortium called Hudson Valley Community Power, and selected Joule Assets, Inc. as administrator. The role of the administrator includes negotiating contracts with providers, as well as sending out all those educational letters.
When a new contract was hammered out with Columbia Utilities, the price for electricity through the CCA had been slightly higher than the variable rate due to a crash in prices during the early months of the pandemic. Since then, ratepayers who chose not to opt out — or who were oblivious to there being any choice — have enjoyed a flat rate just above six cents per kilowatt hour, while their neighbors paying variable rates were suffering from rising bills.
The situation was complicated by the adoption of a new billing system at Central Hudson, which for many users resulted in a high number of estimated readings during a time when rates were changing dramatically. Leaders of Columbia Utilities are claiming that the billing upheaval has impacted them, too, and that it’s serious enough that they have the right to cancel their contract under the “force majeure” clause, which is legal-speak for a situation that is much harder than expected for reasons no one could have anticipated. While the filing with the public service commission was “heavily redacted” according to reports, local leaders and Joule representatives point to the money that could be made for Columbia if it became possible to unload energy futures contracts at current rates. Those contracts, to purchase a certain amount of electricity on a specified date for a particular rate, are used to plan for becoming the supplier of choice for all these CCA participants.
Columbia Utilities has been fined at least twice for deceptive marketing practices, and published reports indicate that at least in Saugerties, that was brought up as a concern when the current contract was being considered. In the most recent case, Attorney General Letitia James fined the company $500,000 this past March for resuming prohibited door-to-door marketing after earlier being fined $200,000 for similar activities. In both cases, customers were lured with low rates and found their bills going up significantly a month or two later.
This particular case against Columbia Utilities will be headlined by and paid for through Joule, but the list of plaintiffs could potentially include all ten municipalities, as well as some individual leaders. New Paltz’s Town and Village boards have agreed to those municipalities becoming plaintiffs, and Mayor Tim Rogers will also be listed individually.
Letters protesting this move have also been sent to the attorney general and the public service commission by leaders of New Paltz and Saugerties, and possibly others.
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