Who should pay for storm damage to an electrical grid?
Not customers, say Orange County lawmakers. The Economic Development Committee of the county Legislature voted unanimously April 27 to tell the state Public Service Commission to deny any request by Central Hudson to charge customers for the cost of repairs from February”™s storm damage.
A similar resolution is being sought by Dutchess County legislators.
Central Hudson officials say the snowstorm cost $20 million and have suggested the company may add surcharges of $2 per month for 36 months to customer bills to meet the expense. The storms Feb. 23 and Feb. 25 Â dropped four feet of snow in some sections of the Central Hudson service territory.
Utility spokesman John Maserjian called that a “hypothetical example” of how storm costs might be recouped, but noted that the costs would not be broken out in a separate line item on bills, but simply included in delivery costs. And he stressed no request has been made yet to regulators to recoup storm costs. He said it is standard procedure for utilities to seek approval to recoup costs of major storms.
Orange County freshman lawmaker Mike Anagnostakis sponsored the legislation opposing the bid to recoup costs, saying Central Hudson could well afford to cover the losses.?In 2009, CH Energy Group, the parent company of Central Hudson, showed total costs of $931 million and had net income after all expenses and dividends were paid of $9.4 million. CH Energy Group paid $34 million in dividends in 2009.
“When it”™s an extraordinary event like this, when it is an act of nature, when it”™s a once in a lifetime situation, where the company has reserves set aside to go ahead and make these payments,” said Anagnostakis, “they should not, especially in their financial situation they are in, they should not be turning around and trying to extract from their customers that suffered.”
Roughly 200,000 of Central Hudson”™s 292,000 customers were affected by the outages, some spending a week in the dark. It was the largest outage in the utility”™s history.?The state Department of Public Service is in the process of assessing responses to the outages by the utilities, said Michael Worden, the department”™s chief of electric distribution systems and emergency manager.?The payment tussle came in the wake of a hearing held by Kevin Cahill, Assembly Energy Committee chairman, on April 23 to examine the utility”™s performance in response to the storms.
Officials with Central Hudson testified that the utility did all it could to restore power. Speaking at the hearing they said more than 1,500 people, both company employees and outside contractors, worked around the clock to get the lights back on in the utility”™s eight-county coverage area.?“The duration [of the outages]Â was the result of how widespread the storm was and how remote some of our equipment is,” said Charles Freni, Central Hudson”™s senior vice president for customer services.
“The February storms left too many households without power for too long,” Cahill said. “Lives were put at risk and people deserve to know what can be done to prevent similar events in the future. Winter storms are a fact of life in our region; our electric grid has to be able to withstand the stress they bring.”
He said the rules governing the grid and the grid itself need modernizing.
