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CLP Helps Households Get Assistance With Utility Debt
Februrary 8 2023
CLP works with other ratepayer advocates as a member of the Energy Affordability Program Working Group (WG), and we are happy to report that the WG’s work has resulted in canceling almost $1 billion in utility debt for New York State households and small businesses. The Working Group, which also includes New York’s investor-owned utilities and members of the Department of Public Service, was created by the Public Service Commission to address the more than $1.9 billion in unpayable utility bills that New York State ratepayers accumulated during Covid-19.
After months of work, the WG came up with a two-phase response. “Phase 1,” approved in June, 2022, provided more than $600,000 to wipe out arrears prior to May 1, 2022, for ratepayers enrolled in utility “affordability” programs – recipients of federal benefits like HEAP or SNAP who are also enrolled in the individual utilities’ special low-income programs. Since up to 50% of eligible ratepayers are not enrolled in these programs, CLP hosted SEVEN workshops to help eligible residents to sign up for the utilities’ affordability programs – which allowed residents across Central Hudson territory to have their prior arrears canceled. Some events also included participation from Public Utility Law Project (PULP), Cornell Cooperative Extension-Dutchess County, SNAP and HEAP representatives from various county Department of Social Services, and members of the staff of the Department of Public Service. Events were held at various locations throughout the mid-Hudson Valley- including Newburgh, Ellenville, Kingston, and Catskill. Phase 1 ended on December 31. The debt relief comes in the form of a credit that’s applied monthly to household balances.
“Phase 2” of utility debt relief was approved in January, 2023. It provides fixed bill reduction amounts to customers who did not qualify during Phase 1. For Central Hudson customers, the maximum amount that will be forgiven is $2,000 for residential customers and $1,250 for small businesses. Again, the program applies only to outstanding arrears accumulated before May 1, 2002. No actions are required to qualify for these reductions, and the utilities are not allowed to shut anyone off until after March 1, 2023, or after all the payments have been made, whichever is later.
Despite energetic efforts by CLP and other advocates pushing for , Central Hudson and the other utilities’ shareholders are covering only 15% of the cost of the debt forgiveness. In Central Hudson’s case, the utility is contributing $4.048 million toward a total estimated cost of $30.134 million (just $13.4 percent!). The remaining $26.086 million will be charged to – you guessed it! – the ratepayers. Central Hudson customers will be paying $0.88 a month for the next seven years!! This may not seem like a large sum, but considering the unfettered profits of what’s meant to be a public utility, Central Hudson should be paying more!
Most recently, Governor Hochul announced another $200 million in funding for additional utility debt relief. It has not yet been decided how this money will be distributed. CLP invites readers to stay tuned. Those who would like to advocate for Making Shareholders Pay! or to complain about the utilities’ failure to implement these programs in a timely way, etc., are invited to enter their comments here.
Our Work in 2022
“As families and local businesses suffer from Central Hudson’s billing fiasco, the utility has chosen to focus on supporting an astroturf campaign by the fossil fuel industry to undermine support for New York’s climate law and a clean, renewable future for our communities,”
“We’re calling on Central Hudson to stop pedaling misinformation about fossil gas as ‘clean’ and ‘affordable,’ and start fixing its broken billing system and providing real solutions to the arrears crisis faced by tens of thousands of customers. ”
More than 48,000 residential customers in the Central Hudson service territory face power shutoffs
Central Hudson is under investigation for their billing practices, rate hikes, and the handling of the winter storm that led to power outages in February 2022. Meanwhile, their profit margin has not been affected and Fortis, Inc., which owns Central Hudson, boasts that their shareholder dividends have continued to go up every year! The crisis is statewide: right now, 1.7 million NY households owe over $1.3 billion in bills that are more than 60 days overdue, meaning that the customers’ accounts can be shut off at any time. Businesses owe another $600 million. We were already paying sky-high prices for energy and the recent bill hikes have seen some New Yorkers' bills double or triple in the last few weeks alone. This is a catastrophe and it's not sustainable.
This is a statewide issue, with state-level solutions. We need our state leaders to take action. We are calling on Governor Hochul, the New York State Legislature, and the Public Service Commission to make the for-profit utilities pay for debt relief, not the ratepayers.
May 2022
When Central Hudson was bought by Canada-based international corporation Fortis, Inc., in 2012, all of Central Hudson’s ownership shares went to Fortis. Today, Fortis runs ten utilities in five countries. It’s a $58 billion corporation that had $9.4 billion in revenue in 2021. According to Fortis’s website, shareholders have enjoyed “48 years of consecutive dividend increases,” and are expecting to ~6% increases through 2025. The top managers aren’t doing badly either. In 2021, CEO David Hutchens’s compensation was $5,447,480. The previous CEO made $10,179,100, including stock holdings. It seems that despite the pandemic, things are going great for shareholders.
Utility shareholders have been making major money throughout the pandemic and it is fundamentally unjust to ask New Yorkers to foot the bill for their profits when so many people have to choose between putting food on the table or keeping the lights on.
The New York legislature has allocated $250 million for utility arrears in response to public pressure, but it isn’t enough to cover all of them. Discussions are ongoing at the state level about how to distribute the funds, who will get help, whether it will only cover arrears that accumulated during the pandemic (March 2020 – March 2022), and whether it should go only to customers who receive HEAP funding – a subset of those in need, since many poor families either do not qualify or haven’t applied. Other proposals include paying off all of the arrears, with the cost to be allocated to other customers over a period of 3-10 years.
Take Action
Communities for Local Power (CLP) has formally petitioned the PSC to deny Central Hudson the rate increase that is scheduled for July 1 until the multiple problems the utility faces are cleared up and it has completed any mandatory actions in response.
CLP participates in Central Hudson rate cases in order to keep our communities’ rates down and try to make sure Central Hudson meets New York State’s climate goals. In the most recent rate case, which ended in November, 2021, we and our allies helped win a rare electricity rate decrease of .2% for 2021-22, while gas rates went up 1.9%. But rate cases over three years, and on July 1, 2022, Central Hudson is scheduled to get a rate increase of 1.3% for electricity delivery, plus another rate increase of 1.6% for gas delivery. In November 2021, when the rate case ended, Central Hudson estimated that for a typical customer the 2022 increases would mean increases of $1.72 per month for electric and $2.17 per month for gas.
These estimates have proved wildly inaccurate, in light of the current enormous bill surge and the billing nightmares many Central Hudson customers have experienced. Bills have skyrocketed. Central Hudson’s dependence on natural gas-generated electricity, which makes up 44% of its supply, is a part of the problem, but utilities are expected to hedge their purchases to protect against sudden cost increases like the ones we are seeing. Central Hudson’s new billing system sent wildly fluctuating, incomprehensible bills to thousands of customers – the PSC site that was set up to receive customers’ complaints already holds 3466 of them.
Environmental disclosure, January 1 – December 31, 2020, is the most recent report available on the company’s website.
These multiple failures have led to three investigations and a proposed law aimed at Central Hudson and other New York utilities:
The Senate Committee on Investigations & Government Operations is investigating utility companies' surge pricing and billing practices and power producers, including Central Hudson. Senator James Skoufis (D - Hudson Valley), who chairs the Committee and launched the investigation, represents customers in Central Hudson territory.
The Public Service Commission (PSC) is conducting its own audit of Central Hudson, focusing on information systems planning and implementation – one cause of the billing mess – and other problems (case 21-M-041).
The PSC is conducting a second investigation into Central Hudson’s response to ice storm Norman, which left most of Ulster County without power for up to four days in February (case 22-00497).
Senator Michelle Hinchey (D, WF - Saugerties) has introduced a bill (S7579, A8806), to investigate the estimated billing practices of Central Hudson and other New York utilities.
Given its egregious failures on so many fronts, does Central Hudson deserve a rate increase? We say no way.