CLP Announces Major Victory in the
Central Hudson Rate Case!
Joint Proposal Approved By the PSC
In the summer of 2017 Central Hudson submitted a new rate plan, asking for permission to charge residents and small businesses more for electricity and gas beginning in 2018. As a party to the rate proceeding, CLP submitted testimony and actively participated in settlement negotiations. Seeking a reduction in the fixed charge was a top priority of CLP’s in this rate case, in addition to fighting the rate increase.
On April 18th, 2018, Central Hudson filed a Joint Proposal with the NYS Public Service Commission for a three-year rate plan that would include a more modest rate increase than first proposed, as well as the first-ever reduction in the utility’s fixed residential customer charge. Central Hudson’s fixed charge of $24.00 per month—the highest in the state—would drop by $3.00 in this year and another $1.50 over the next two years, bringing it below the fixed charges of Orange & Rockland Utilities and Rochester Gas & Electric by July 2019.
This is an important victory for fairness in our electricity rates because bills will be more closely tied to how much power customers actually use.
While CLP would have preferred to see a steeper reduction, the agreement among the parties to reduce the fixed charge is a step in the right direction and an unquestionable win for residential customers.
We won other improvements as well! The Joint Proposal filed by Central Hudson also calls for a more modest overall rate hike than first proposed last August, when the utility asked for an increase of as much as 11.6% for residential customers. As a result of negotiations among the parties, the rate hike has been reduced to 1.04% in 2018-2019, 2.99% in 2019-2020, and 4.41% in 2020-2021. The actual rate increases would be higher but the utility would apply off-setting credits, called “moderators,” to reduce the bill impact to these percentages.
CLP actively participated in settlement negotiations but ultimately chose not to sign on to the Joint Proposal out of concern that the rate increase was too high, particularly in the third year, when the average residential customer would see a bill increase of $5.04 per month.
While declining to sign, CLP recognizes improvements over Central Hudson’s original proposal, in addition to the reduction in the fixed charge. We strongly opposed the company’s initial request for an increase in its guaranteed profit rate, and the agreement reached would actually reduce the rate of return below the current level of 9% to 8.8%. We also opposed a new “service size charge” for residential customers as well as funds for promoting natural gas expansion, both of which have been dropped from the Joint Proposal. Importantly, too, we called for more aggressive energy efficiency targets and programs to support “beneficial electrification,” including a shift from fossil fuel-based heating in buildings to heat pumps, and support for wider adoption of electric vehicles. Provisions for these are included in the approved rate plan.
The new rate plan will become effective on July 15.