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After New Yorkers see sudden price increase, Gov. Kathy Hochul urges Con Ed to reform itself

“The extreme utility bill increases we are seeing across the state come at a time when New Yorkers are already struggling financially following the COVID-19 pandemic,” Governor Hochul said in a statement on Friday. “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 October, the Public Service Commission (PSC) predicted price increases this winter season, leading the Hochul administration to launch an aggressive campaign advertising its relief programs for struggling consumers.

In a February 11th letter to the utility from PDC chairman Rory M. Christian wrote to Con Ed that it could have done more to alert customers that prices would rise dramatically for many customers. Con Ed, Christian wrote, “should have foreseen the likely electric commodity price spikes and done more to provide advance notice to their customers and other stakeholders.”

Christian also asked Con Ed to better calculate the benefits of its energy purchasing power and the savings it receives from hedges it places on the market. Those savings, Christian writes, should then be passed on to the consumer during the next business cycle. On top of that, Con Ed should direct consumers to state programs that could help relieve the financial strain on households.

To that end, Gov. Hochul reminded New Yorkers on Friday of several existing programs to help with heating costs, including the Home Energy Assistance Program (HEAP), which set aside $373 million to help New Yorkers keep their houses warm through the winter. Already, $208 million of that pot has been spent. It’s being supplemented by a $90 million dollar federal program that began taking applications this January.

Hochul is not the first (nor, probably, the last) governor to ask Con Ed to review its practices and better communicate with its customers (who have no other energy-provider options). In 2019, former Gov. Cuomo even went so far as to threaten to yank the utilities license for operating in New York City after a series of blackouts. Instead, in 2020, the Cuomo-controlled Public Service Commission passed a series of rate hikes, totalling over 12%, ostensibly for Con Ed to improve its infrastructure — a move that’s only compounding the price spike as gas prices soar.

“Customer bills have been impacted by the cost of natural gas in the generation of electricity. Con Edison does not generate electricity, nor can we manage the financial practices of the private power generators or the suppliers of the natural gas,” Jamie McShane, the director of media relations for Con Edison told Gothamist in an emailed statement.

By law, Con Ed must sell the energy that it buys at cost. What New Yorkers pay for on their bill is that energy cost, plus the public service commission-approved price for the use of Con Ed’s infrastructure (the wires that bring you that energy). Right now, New York state gets over 70% of its energy from fossil fuel, with much of home heating costs coming from natural gas. With the costs of natural gas rising amidst a frigid winter, New Yorkers’ bills are increasing, meaning that the relief set aside by governments at all levels to help residents isn’t going as far.

Read More: So Long, Indian Point Nuclear Plant. Hello, More Fossil Fuels.

“The bottom line is that the purchasing power of the regular LIHEAP (Low Income Home Energy Assistance Program) appropriation is down by more than $1 billion,” Richard Berkeley, the Executive Director of the Public Utility Law Project of NY, told Gothamist, referring to the federal government’s assistance program.

Right now, more than a million people in the state are currently in arrears on their energy payments. A utility shut-off moratorium ended on December 21st, meaning that New Yorkers could face the cut-off of heat during the winter months ahead. At that time, Con Ed sent out 128,299 termination notices.

In the long-term, the state must shift to carbon-free sources of electricity by 2040, substantially reducing price fluctuations and driving down the overall cost of electricity. But in the near-term, the cost of energy might stay high — as Con Ed moves to upgrade its infrastructure for a reliance solely on electricity to power the city.

For the hundreds of thousands of New Yorkers now feeling the energy pinch, help might be on the way. The AARP and several other consumer-interest groups are lobbying the Hochul Administration to appropriate $1.25 billion in this year’s budget to go towards helping low-to moderate-income energy customers in the state. The money would come from the $12.5 billion federal American Rescue Plan funds the State has received. This week, State Senator Kevin Parker, the chairman of Senate Committee on Energy & Telecommunications, reiterated that call as the state’s two legislative chambers and Hochul hammer out a budget deal in the coming weeks.

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