On March 4, 2022, Sen. James Skoufis, chairman of the New York Senate Committee of Investigations and Government Operations, launched a probe into the rising costs of heating and electric bills across the state.
After receiving complaints from constituents in his district about the rising prices of heating costs this winter, Skoufis spoke from the lawn of a New Windsor resident suffering financially from the situation.
“I’m launching an investigation into Central Hudson, Orange and Rockland, Con Ed, the power suppliers that they purchase from, the state stakeholders, all under threat of subpoena,” Skoufis said. “Document and information requests will soon be issued from my committee to these entities because we can’t stand by and allow utilities to run roughshod over our wallets without asking them the tough questions and holding them accountable.”
According to data reported to the state’s Public Service Commission, roughly 1.3 million New Yorkers are behind on their utility bills by more than 60 days. They also found that the total amount owed by New York’s ratepayers to gas and electric companies to be $1.73 billion, a 126 percent increase from February 2020.
“In addition to surge pricing and billing system errors, our investigation will be looking at the state’s action or inaction as utility regulators and the poor communication between utilities and ratepayers,” Skoufis said.
Crystal Butler, a Bronx resident and Con Ed ratepayer, has seen her utility debt rise to the tune of $17,000. She explained that a bill she and her mother, a former employee of the Office of General Services, had received from a previous dwelling was far too large for the size of their apartment due to a shared meter, and that they were in the process of resolving the amount with Con Ed when they moved.
This roughly $6,000 bill followed them to their new residence.
Soon after, her mother passed away and the apartment they shared as well as the full amount of the utility bill, which was now nearly $20,000, became Butler’s sole responsibility. Butler was dogged by shut off notices which only ceased during the utilities shutoff moratorium which was put into place during the COVID-19 pandemic.
After the moratorium ended in December 2021, Butler began to receive shut off notices again and when she requested an explanation on how the price increased so dramatically she was directed towards payment plan options.
“She [her mother] had to endure numerous cutoffs and when the cutoffs occurred she had to find places to store frozen food, you know other places and peoples houses. At times she had to choose between food, rent, medicine or pay Con Ed,” said Butler.
Con Ed recommends in the case of a shared meter that rate payers contact them and give them access to their home, meter and contact info of their landlord. If an investigation finds evidence that a tenant is being billed for someone else’s energy use the responsibility falls on the owner to correct the situation and if they do not the responsibility falls on them to resolve the bill.
In the event another tenant is using energy being billed to a different tenants meter then the charges would be passed to them. In both cases the tenant who asked for an investigation will see their bill amended in the end.
Con Ed, which reported a 2021 net profit of $1.3 billion, is currently requesting from the Public Service Commission the right to increase electric rates 9.7 percent and to increase heating rates 14.6 percent.
In a letter to Secretary of the New York Public Service Commission Michelle L. Phillips, President of Con Ed Matthew Ketschke said, “Our proposed rate plans are designed to fund the investments necessary for a safe and reliable clean energy future, including the investments summarized earlier, and our operating expenses, like local property taxes.”
According to data collected by the AARP from the NYS Public Service Commission Case 14-M-0565, of the 1.3 million New Yorkers behind in their utility payments, over 330,000 are low-income citizens who are in energy assistance programs. Their utility debt alone totals nearly $420 million.
Con Ed has sent out 232,648 utility termination notices as of the third quarter of 2021.
Similarly, Orange and Rockland Utilities, a Con Ed owned company, filed a request on Jan 29 to increase its utility rates.
They requested approval to increase electric rates 3.3 percent and gas rates 4 percent. They cited the need for the increase to be low sales forecasts and a need to maintain their infrastructure, such as power and pipelines.
Orange and Rockland reported a net income of $75 million for 2021. Nearly 3,000 ratepayers owe the company over $3.5 million.
“Con Edison is taking action to address the increase in energy supply costs and its impact on our customers. While supply costs and weather related increases in energy use are outside of our control, we do control our billing process and are looking to mitigate future supply cost volatility for our customers” the company said in a statement.
“We are reviewing all of our practices that affect customer supply costs, including our energy-buying practices, the tools we use to reduce supply price volatility, the way we communicate changes in supply prices, and our programs to help customers who have fallen behind on their bills.”
Central Hudson, a utility provider for parts of the Mid-Hudson region, has also come under fire for its billing system.
According to both a hearing carried out by the Public Service Commission and public comments about Central Hudson, it was found that some ratepayers received bills that were double or more than what they previously paid without any identifiable reason.
Richard Marks, a ratepayer who filed his grievances in the public comments section, explained that he was not only charged more than he thought reasonable, but in the case of a second property charged twice.
“I just discovered that they have been double charging me since December, inexplicably adding Columbia Utilities as a second provider and charging me twice for the same power (one charge from each utility company),” said Marks. “I called Central Hudson and spoke to a representative who agreed that something was definitely wrong with both bills, but she couldn’t figure out what. She transferred me to their corporate office, where I waited on hold for an hour before giving up.”
The bill, as a result of the charging mistake, came to $682 for a property that Marks claims he is rarely physically inside.
In addition to billing systems, another issue that Skoufis identified with utility companies is the rise in delivery charges.
“You look at any ratepayer’s utility bill and the delivery costs are comparable, sometimes even higher than the supply cost,” Skoufis said. “At the end of the day, yes, the utilities have to buy the natural gas from the suppliers and that cost is going to be passed on, but they have the same pipes, they have the same infrastructure, they have the same fixed costs regardless of what the volume is and regardless of what the supply costs are. And so it stands to question how much they are profiting off this crisis in the past three months.”
Allan Drury, public relations manager for Con Ed, said, “You have a transmission and distribution charge, also known as a delivery charge. You’re paying Con Edison that charge for bringing the energy to you, to your home or business. So that’s where the company makes a profit and that rate is set by the New York State Public Service Commission, we’re a very regulated company.”
Drury detailed the billing process while breaking down price increases at the start of 2022. He explained, using an example of a New York City ratepayer using 300 kilowatt hours of energy in a month, increases would have seen a jump of over 20 dollars from February to March or an increase from $15.41 to $36.32 for supply costs. Delivery costs, significantly higher than supply costs, would not fluctuate as much with $64.28 in February and $64.56 in March.
He said, “January electric bills rose sharply from December and that caused the customer concerns that you have seen in the press. Those increases were due to increases in the supply of energy, which Con Edison does not control.”
In late Feb, Richard Berkley, executive director of The Public Utility Law Project, sent a letter to the State Legislature. He said, “If this crisis is not resolved, it will impair millions of households’ credit, require New Yorkers to choose between housing, medical, food or utility arrears spending, reduce economic activity that is essential to restoring and preserving the viability of our communities and small businesses, and allow millions of New Yorkers to languish in debt that will not be paid of for many, many years.”
In this letter Berkley laid out a plan the legislature could use to solve the utility arrears issues many New Yorkers face. He suggested they allocate $1.25 billion of the American Rescue Plan’s funds to help low-income and moderate-income citizens pay down their past due bills.
Additionally, he suggested that the state allocate a further $200 million in tax credits to private water, telephone and broadband companies to encourage them to report arrears and match ratepayers debt dollar for dollar. He also requested that the state extend the shutoff moratorium to June 30, 2022.
Lastly, he recommended they create an arrears resolution program for ratepayers who have exhausted every other option.
In response to some of these issues, Assemblyman Angelo Santabarbara, D-Rotterdam, introduced a bill (A.9616) to allow ratepayers to claim payments for residential heating as a personal income tax deduction.
“After a challenging two years, New Yorkers are now facing inflation and a rising cost of necessities such as food, gas and utilities,” said Santabarbara. “That’s why I’ve introduced new legislation that will allow our families to use the expense of heating their homes as a tax deduction. During this period of economic recovery, we must continue to find ways to help hard-working families save money.”
Earlier this year, Santabarbara also introduced the Utility Ratepayer Protection Act (A.1512),
which would require legislative approval of utility charge increases in New York. The bill is currently sitting in the Assembly’s Energy Committee.
Skoufis also claimed that there were ongoing conversations during budget negotiations to provide relief to residents suffering financial hardship as a result of the utility price surge and to firm up regulatory efforts within the state. This relief would come in the form of rebates, although the amount of funding and the parameters of who would are unclear.
On April 9, 2022, Assembly Speaker Carl Heastie announced that $250 million would be directed to a utility arrears program as a part of the 2023 state budget.
“Every New Yorker deserves a safe, affordable place to call home, and the Assembly Majority is committed to making that a reality,” Speaker Heastie said. “This budget makes critical investments in programs to provide rental and landlord relief, and give more families a path to homeownership.”
The funds would be administered by the Department of Public Service and would be available to New Yorkers who are facing financial difficulties as a result of utility pricing.
Currently, New Yorkers who are having difficulty heating their homes can look to the Home Energy Assistance Program. The program helps qualified applicants pay for home heating and efficiency costs.
Joe Jenkins, associate director of media relations for Central Hudson, released a statement in response to the investigation and allegations of improper pricing habits in the company.
“Central Hudson will fully cooperate with the investigation into the recent surge in energy supply prices. Global events, coupled with a strong demand for energy worldwide have placed upward pressure on energy prices and continue to do so,” Jenkins said. “The increases in energy prices have created a financial burden on everyone. Utility bills reflect the prevailing market prices for natural gas and electric supply and are passed through, without any markup, to pay power plant operators and natural gas providers.
“As such, customers pay the same price for natural gas and electricity that Central Hudson does,” Jenkins added. “In an effort to mitigate market volatility, Central Hudson employs hedging measures to the maximum extent allowed by state regulators. These measures include contracting for a portion of energy at fixed prices and purchasing gas at pre-season prices and placing it into storage. These practices helped save Central Hudson customers more than $22 million for the January and February billing periods.”
Jenkins added that the company offers options for ratepayers facing difficulties to pay their bills in the form of payment plans and other programs. He added that the replacement of their old billing system has even by their own evaluation seen more issues than they anticipated and that they are attempting to resolve them.
“We know we are not meeting many of our customers’ expectations, nor our own internal standards,” said Jenkins. “We have made significant progress in identifying and implementing system fixes, and expect the majority of impacted customers to have received corrected bills and be back on their regular billing cycle by late April.”
Skoufis and the Senate Committee on Investigations and Government Operations will determine if a hearing is necessary based on the content of the documents and materials they have requested from the utility companies.