Gov. Kathy Hochul has now become the highest-ranking state official to join the chorus of criticism directed at Con Edison in the wake of its dramatic increases in electricity costs billed to its customers. At the same time, the head of the state”™s Public Service Commission (PSC) that regulates the utility wrote to Con Ed”™s CEO. The letter called for a detailed review of the utility’s billing practices by the end of the month along with other steps to head off a repeat of the dramatic price hikes that affected Con Ed”™s 3.5 million customers.
Hochul said, “Even though the spike we are seeing in electricity, natural gas and fuel prices were predicted and are due to severe winter weather, I am calling on Con Ed to review their billing practices because we must take unified action to provide relief for New Yorkers, especially our most vulnerable residents.”
In his letter to Con Ed CEO Timothy Cawley, PSC Chairman Rory M. Christian said, “I write today seeking several actions by Con Edison to (1) mitigate the immediate problem, (2) reassess power supply billing practices to reduce the risk of severe price volatility in the future, and (3) improve communications to customers regarding commodity pricing, especially in advance of anticipated bill increases.”
In a statement issued by Hochul”™s office, Christian was quoted as saying, “We understand that increases in winter electric and gas bills cause financial hardship. While the PSC and the utilities cannot control supply prices, utilities can improve their procurement and billing practices to reduce the likelihood of dramatic price swings in the future and we are requiring Con Edison to address this going forward.”
Con Ed has blamed the increases in its charges for electricity on the higher cost of natural gas used to run generating plants owned by companies from which the utility buys the electricity it distributes. Some Con Ed customers found themselves facing bills for electricity used in January that were as much as 220% higher than in December.
Hochul”™s statement explained, “Neither the utility nor the Public Service Commission controls the price of the supply component of energy bills. However, to better protect consumers from sudden commodity price increases, utilities use a variety of buying methods and hedges, including short-term and long-term contracts. While hedging is a strategy shared by all utilities, each utility applies the value of these hedges differently to customer utility bills. In the case of Con Edison, their billing practices for customers was a contributing factor to the significant increase in supply rates and ultimately customer bills.”
Christian said in his letter, “The Department has determined that this combination of higher market prices for natural gas and electricity coupled with higher energy use resulted in significantly higher bills for consumers. This situation is occurring throughout New York State and is also affecting utility customers throughout New England, which experienced even higher natural gas and electricity commodity prices than New York. While the Department recognizes that these weather-related price impacts are outside of the utilities”™ control, there are several actions that Con Edison should consider taking to address this situation.”
The Business Journal reported on the growing number of voices expressing concern about Con Ed”™s escalating bills to consumers just a few hours before Hochul”™s office released her position on the matter along with Christian”™s letter to Con Ed. That article can be viewed at the link https://westfaironline.com/145373/con-ed-criticized-for-dramatic-hike-in-electricity-charges/
