Central Hudson Asks to Increase Electricity, Gas Rates

Jul 11, 2023

Officials say billing fix should come first

Central Hudson is proposing to increase the rates it charges to deliver electricity and gas, drawing a backlash from elected officials who say the utility should first remedy the billing problems at the center of an ongoing state investigation.

The company said on Monday (July 31) that it will seek approval for delivery rates that in 2024-25 would increase the average residential electric bill by 16 percent and gas bills by 19 percent. It said its “typical” customer would be charged about $30 per month more for each service.

The rates approved by the state Public Service Commission after it reviews a utility’s finances are typically much lower than what a utility requests.

In 2020, Central Hudson proposed raising the average monthly residential bill by $7.76 for electricity and $9.45 for gas.

The PSC instead approved in November 2021 a three-year plan in which residential customers paid 33 cents less per month for electricity during the first year and increases of $1.72 and $1.82 for the final two years.

Gas rates total $5.31 in increases over the three-year agreement, which ends on June 30, 2024.

Whatever rates are approved would take effect on July 1, 2024. Central Hudson’s customers include 5,200 residents and businesses in Cold Spring, Nelsonville and Philipstown and 6,600 in Beacon.

On July 28, the state Department of Public Service (DPS), the administrative arm of the Public Service Commission, announced that Central Hudson had agreed to pay for an independent monitor to “verify” the utility’s progress in correcting the sources of its billing mistakes.

According to DPS, the monitor will also “accelerate” Central Hudson’s transition from bimonthly to monthly meter readings, beginning with pilot programs later this year and early 2024. The “vast majority” of the utility’s customers should be billed based on monthly readings by December 2024, instead of an initial goal of February 2026, said DPS.

In Friday’s announcement, DPS said Central Hudson’s billing problems have lessened. Just 1 percent of a sample of complaints filed between February and March were for billing mistakes, according to DPS, which said the independent monitor will “verify that these corrective actions are working and will be sustained.”

Still, U.S. Rep. Pat Ryan and state Assembly Member Jonathan Jacobson, Democrats whose districts include Beacon, criticized Central Hudson’s proposal.

“While the company is now working to fix these issues and rebuild trust, it’s absolutely unacceptable to raise costs on our hard-working families until all of their billing issues are fully remedied,” said Ryan in a statement.

Revenues from its latest proposed hike, according to Central Hudson, are essential to replace aging transmission and gas lines, connect solar and wind projects to its system and add more personnel and equipment to restore power after outages caused by extreme storms, which have become more frequent.

Central Hudson said it plans to expand financial-assistance programs for low-income customers and increase its workforce by 20 percent. Although it requested a one-year agreement, the company said that during the state’s review it would consider a three-year plan that would allow for lower annual increases.

“By making these necessary investments, we will not only maintain the safety and reliability of our utility operations but also comply with New York State’s nation-leading clean energy laws, protect the environment and improve customer service,” said Joe Hally, the company’s vice president of regulatory affairs.

Despite those assurances, Central Hudson’s proposal will be overshadowed by its efforts to remedy the problems that caused widespread billing problems when the utility switched to a new $88 million customer-service system in September 2021 and customers began receiving wildly inaccurate bills.

The problems, including programming errors, caused delays in issuing statements that lasted more than three months for some customers and overcharges that affected more than 8,000 customers.

With the system erroneously blocking bills from being sent for prolonged periods, Central Hudson began sending invoices based on estimates, in violation of approved procedures for using them instead of actual meter readings, according to a DPS report.

Jacobson said the utility “needs to get its house in order” before proposing higher rates.

“Central Hudson is mistaken if it expects to be rewarded for nearly two years of untimely and inaccurate billing,” he said in a statement. “Customers have suffered enough without the added insult of an unwarranted rate hike.”