Just six months ahead of the expiration of its current three-year rate plan, all bets are off for Central Hudson’s wish to hike its rates 16 percent for electricity and 19 percent for gas. On January 4 the New York State Public Service Commission (PSC) announced it was going ahead with a January 24 date for an evidentiary hearing to be held in an Albany board room before administrative law judges James A. Costello and Ashley Moreno.
In order to receive and permit cross-examination, the hearing will “continue each successive business day as needed.”
The preference for litigation by the Department of Public Service (DPS) rather than seeking a negotiated settlement is unusual among recent Central Hudson rate cases.
Counsel from the law firm Cullen and Dykman, representing Central Hudson, explained in a transcript that, “[Central Hudson] did have a brief discussion with [DPS] counsel regarding the possibility and the desire of the company to engage in settlement. Unfortunately, it was indicated back to us by staff that they were not interested in pursuing that at this time.”
“Under this litigated method, new utility rates would be set for one year, and the rate plan would expire in June 2025,” Central Hudson spokesperson Joe Jenkins explained.
The DPS’s decision to litigate pleased Ulster County executive Jen Metzger. Negotiated settlements, the norm for DPS in rate increases, are held behind doors closed to the public. Litigation takes place in the public eye.
“Given the egregious issues with billing and customer service that have plagued our communities for more than two years, we need this rate case litigated in public view,” said Metzger, who signed on as an intervening party in two previous Central Hudson rate cases, both of which took the path of negotiated settlements.
“You can’t talk to anyone,” explained Metzger, “and you have those power dynamics because you have unequal resources, and of course the utility has the most power of all because it controls all of its own information.”
Central Hudson had “literally an army of attorneys.” The DPS had the power of the state behind it. Also represented were the attorneys for large industrial and commercial customers.
Metzger recalled the power dynamic vividly.
“They were such bullies,” said Metzger, laughing at the memory. “They were just so cruel.”
This hearing will need a larger board-room table. The DPS lists 54 parties signed on to this rate case, more than double those signed on in 2014. Many of the intervening signatories have more heft and more exposure. For the first time, even Walmart has signed on.
Fortis, the Canadian parent company which purchased Central Hudson for $1.6 billion in 2012 and reported revenues of $9.4 billion as of March 31, 2022, will need to bankroll blizzards of interrogatories.
Before Metzger’s political career, she was a co-founder of Communities for Local Power(CLP), a group originally formed around the idea of stopping the private company takeover of the public utility a decade ago. The attempt failed. Since that takeover in 2012, the results, said Metzger, have been depressingly foreseeable.
As the years passed, Metzger searched for a better way. When she served in the state senate, she was a fan of the New York Build Public Renewables Act.
She believes the most sustainable and most equitable solution would be having local communities having ownership and control. “But in terms of taking over the utilities from private, investor-owned companies,” she said, “you’re also taking on this antiquated infrastructure that they underinvested in, which is a huge expense. So it’s a really challenging situation.”
Central Hudson spokesperson Joe Jenkins writes that “Central Hudson will continue to highlight the need for continued investment in the energy system, including for updating and replacing aging infrastructure, enhancing responsiveness to severe-weather events, and complying with New York State’s clean-energy policies.”
It’s possible Central Hudson could avoid litigation by backing off its rate hikes, as Metzger, state senator Michelle Hinchey, assemblymember Sarahana Shrestha and congressmember Pat Ryan have urged.
“The final determination regarding Central Hudson’s terms and conditions of service will be made by the PSC,” said DPS director of public affairs James Denn.
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