Environmental and Consumer Advocates Win Fossil Fuel Reductions, Language Access Improvements, and Rate Hike Cutbacks from Central Hudson Utility



Jessica Azulay, Alliance for a Green Economy, jessica@agreenewyork.org, 917-697-447
Susan Gillespie, Citizens for Local Power, susan.h.gillespie@gmail.com, 914-388-3506
Richard Berkley, Public Utility Law Project, rberkley@utilityproject.org, 917-512-5334 

After months of negotiations with the Central Hudson Gas and Electric Corporation, public interest groups have achieved commitments from the utility to reduce fracked gas sales, translate the company’s website and customer materials into Spanish, and cut the overall bill increases the company was seeking. 

These commitments are memorialized in a document called a Joint Proposal, which was negotiated between the utility, state regulators, businesses, local governments, and public interest organizations. The negotiations began after the utility asked the Public Service Commission (PSC), the state agency that regulates the utilities, for a rate increase. The Joint Proposal is filed publicly on the PSC website and the Commission will vote whether or not to approve the negotiated settlement.

Central Hudson’s rate filing asked the Public Service Commission to allow it to raise electricity and gas bills by nearly 3%, even amidst a historic economic and climate crisis. Several public interest organizations, including Citizens for Local Power, Alliance for a Green Economy, and the Public Utility Law Project, intervened in the case to oppose the rate hike, reduce greenhouse gas emissions, and push for changes in the way the company treats its customers. 

The bill increases were cut back during negotiations, which resulted in an electric bill decrease in the first year and increases of less than 2% per year in subsequent years. Gas bill increases were kept under 2% for all years of the agreement.

“It’s really unusual for a utility to reduce its rates, but surely it is the right thing to do right now, especially since Central Hudson had just received an increase of 4% when the negotiations started in 2020,” said Susan Gillespie, President of the Board of Citizens for Local Power. “Thankfully, the negotiations actually resulted in an even bigger decrease for customers who receive HEAP (Home Energy Affordability Program) benefits, and the list of ratepayers who are eligible for the lower rates is being expanded to include the criteria used for federal Telephone Lifeline discount recipients. We are delighted that this proved possible thanks to the involvement of so many groups who intervened to defend customer interests at this critical moment.” 

Responding to climate concerns raised by the various parties, Central Hudson has agreed to become the first utility in New York that plans to reduce its overall gas sales through energy efficiency, renewable heating, and other methods. The company, which has about 309,000 electric and 84,000 gas customers, agreed to reduce gas sales by 2.5% from 2019 levels over the next four years and to remove claims that gas is more environmentally friendly than oil from its website. The company also agreed to achieve greater electricity efficiency savings.

“We hope this truly is a turning point for utilities in New York,” said Jessica Azulay, Executive Director of Alliance for a Green Economy (AGREE). “In a world with relentless wildfires, floods, and heat waves, we have less than a decade to dramatically reduce greenhouse gas emissions. We are angry and disillusioned that those charged with protecting the public, like the Public Service Commission, don’t require gas utilities to reduce fossil fuel sales, yet we continue to fight for a livable planet. We commend Central Hudson for working with the intervenors and taking this initial step toward climate action.”  

After being criticized by local organizations about its treatment and communications with Spanish speaker customers, the company also agreed to translate its website into Spanish. 

“Providing necessary information and resources in an individual’s native language is a massive step in the right direction regarding language justice and clean green technologies for Central Hudson,” said Susie Ximenez, Community Engagement Coordinator at Citizens for Local Power. “We have been pushing for Central Hudson to include Spanish Language materials, resources, bills, and notifications. Many of our community members are struggling financially and are at risk of termination; the proper information and resources will start to be shared with customers online, printed, and shared via culturally competent customer service representatives in their native languages without any excuses.”

“Thanks to the hard work of our partners at AGREE and Citizens for Local Power, as well as the support and involvement of many local elected officials, a settlement that adequately acknowledges the financial challenges facing Mid-Hudson Valley residents was reached,” said Richard Berkley, Executive Director of the Public Utility Law Project of New York (PULP). “The significant bill impacts initially proposed were mitigated and the company agreed to resolve consumer COVID-19 arrears if the State does not act to do so before winter. We also have a commitment to greater transparency and language accessibility in billing and consumer notifications, broader eligibility criteria for low-income/fixed-income households to enter the Low-Income Affordability program, and an embrace of the necessary changes created by the Climate Leadership and Community Protection Act.” 

The Joint Proposal does not directly address the more than $22,167,558 of debt that 27,831 Central Hudson customers find themselves mired in. Instead, the proposal asserts that the PSC should address the debt crisis within a more general ongoing case that applies to all utilities. However, in recognition that the PSC has thus far failed to alleviate the mounting debt crisis, the Joint Proposal sets out a process for the utility and public interest groups to develop an arrears management plan together if the PSC continues to ignore the issue. 

As part of the agreement, the Company will see a return on equity (ROE) of 9%, which is an increase over the 8.9% that they were allowed in 2018, during the most recent rate case. The Company had asked for 9.1%. In 2009, by comparison, during the previous economic crisis, Central Hudson’s Return on Equity was fixed at 6.82%. 

“It is unacceptable for the Commission to sit by while company shareholders earn even bigger returns and so many people can’t cover their basic needs,” said Citizens for Local Power’s Susan Gillespie. “In the absence of strong Commission action on the COVID economic crisis and clear directives about reducing shareholder profits, there is only so far that community and grassroots groups can get in negotiations with individual utilities. We need to see stronger action from the PSC to ensure that utility shareholders are not earning excess profits at the expense of the wellbeing of the communities they are there to serve. People need electricity and heat for their daily existence, their children’s education, and more, and the scale of utility debt is overwhelming right now.”

A summary of the Joint Proposal can be found here.

The full Joint Proposal can be found here.