Consumers Pick Up Utility’s Rate Case Expenses– But Lack Own Seat at Table
NEW YORK, New York – Long Island’s residential utility ratepayers – who already pay among the highest electric bills in the nation - are footing PSEG’s $4.4 million bill to push its proposed electric rate hike on them.
PSEG is hitting up Long Island ratepayers for its costs to lobby the Long Island Power Authority (LIPA) for a nearly 12 percent proposed electric rate hike over three years, starting in 2016, AARP and the Public Utility Law Project (PULP) found in a review of documents (see page 7, “Rate Case Cost”). PSEG’s proposal, which includes mechanisms to allow for other cost increases beyond the rate hike, would amount to the biggest rate increase in the history of LIPA.
Yet while Long Islanders pay for PSEG’s costs to push for the rate hike, they have no meaningful seat of their own at the LIPA table.
AARP and PULP say what’s good for the goose should be good for the gander; if a utility company can bill its customers to push rate increases on them, customers should have funding to push back.
“This is salt in the wound for Long Islanders, who already pay 62 percent more than the national average for the basic necessity of electricity,” said Beth Finkel, state director of AARP in New York State. “It’s not right that consumers have to pay again for PSEG to try to raise those already sky-high rates without having a meaningful seat of their own at the table.”
In 40 other states, they do. New York is one of just 10 states, and by far the largest, without an independent advocate for its utility consumers.
“For Long Island’s electric customers, PSEG's proposal for an approximately 12% rate hike adds injury to insult,” said Richard Berkley, Executive Director of the Public Utility Law Project. “There is already an affordability crisis hitting Long Island’s low- and fixed-income customers, which this historically high rate increase will worsen, driving too many of Long Island’s most vulnerable families deeper into economic crisis and forcing them to choose which vital expense – food, medicine, heat or power – they will have to do without."
Independent utility consumer advocate offices in other states, which have the power to legally challenge unfair rate hikes, save ratepayers far more than they cost. Connecticut’s office reported $243 in rate reductions for every dollar spent in 2012, while California’s reported a 153-1 return on investment.
But if anyone needs a strong voice at the table, it’s New Yorkers.
Long Islanders paid 62 percent more than the national average for their electricity in November (20.23 cents per kilowatt hour vs. 12.46 cents), the last month for which data is available from the U.S. Energy Information Administration.
A 2014 AARP survey of Long Island voters 50 and older found 72 percent at least somewhat worried about affording their utility bills (with nearly half “extremely” or “very” worried) and 83 percent reporting a household financial strain from the cost to heat their homes last winter.
“This is about protecting Long Islanders’ already fragile kitchen table economies,” added Finkel. “For the many older residents on fixed or limited incomes, they’re often forced to choose between food or medication and keeping the heat and lights on when their utility bills go up.”
Last year, AARP revealed that New York’s investor-owned utilities pass onto their customers more than $10 million a year in costs to push rate hike and other regulatory changes, typically amortized over three to five years. PSEG, a public power entity, also intends to spread ratepayers’ costs for its current rate hike push over three years.
The state Assembly has passed a bill the last two years to create an independent utility consumer advocate office. But State Senate Majority Leader Dean Skelos has not allowed a vote on the legislation in his house. AARP and PULP are urging the full state Legislature to support this year’s bill.
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