The New York Public Service Commission (PSC) has approved a three-year utility rate increase for New York State Electric and Gas (NYSEG) and Rochester Gas and Electric (RG&E).
The rate agreement will amount to an increase of approximately 24% in costs for NYSEG electric customers, and a 16% electricity rate increase for the average RG&E customer, spread out over three years.
The utilities say that the average residential customer will see an increase of around $10 per month the first year, starting in November.
“A double-digit rate increase is not acceptable.”
The rate increase was met with pushback from lawmakers and consumer advocacy groups such as AARP, who argue it is unaffordable for many New Yorkers.
“A double-digit rate increase is not acceptable,” state Senator Lea Webb, who represents Ithaca, Cortland and Binghamton, said. “It is ignoring the glaring cries for relief that we are hearing from our constituents every day.”
NYSEG and RG&E, both part of the energy company Avangrid, have argued that increased rates would pay for crucial infrastructure upgrades, customer service improvements, and initiatives to help meet the state’s clean energy goals.
“This plan is an investment in the future reliability and resiliency of the New York grid,” said Avangrid CEO Pedro Azagra in a statement published by NYSEG. “Each year, the impacts of climate change increase and we need to make investments to not only mitigate these risks for our customers, but also enable more renewable energy like wind and solar.”
Assemblywoman Donna Lupardo, who represents the Binghamton area, said consumers were being unfairly burdened by the cost of utility upgrades and infrastructure.
“As we transition to a clean energy future, we cannot have this born on the backs of working families [and] small businesses,” Lupardo said.
The rate case negotiation comes as the state has investigated, and fined, NYSEG and RG&E for overbilling and customer service issues. Irene Weiser, coordinator of the clean energy advocacy group Fossil Free Tompkins, said customers have experienced overcharging and a lack of reliability from the utility companies.
“They don’t deserve a rate increase until they provide better service,” Weiser said. “If the PSC grants this rate increase, they will have lowered the standards for performance for all utilities.”
“This is not a question of corporate greed.”
Utility rate cases are negotiated around every two to three years. In 2020, NYSEG and RG&E asked the state to approve a double-digit rate increase. But because of challenges created by the COVID-19 pandemic, the PSC voted to reduce those increases to under 2%.
Under the most recent proposal announced in June, the utility companies initially sought $447 million in revenue from rate increases in the first year. On Thursday, the PSC reduced that amount to $217.3 million in the first year, roughly 50% less.
Although most of the seven commissioners expressed concerns over the rate increase, they ultimately approved it unanimously.
Commission Chair Rory Christian said the commission reduced the rate increase in 2020 because of the pandemic. But he added they expected that a larger increase would be coming in three years.
“This is not a question of corporate greed. This is not a question of executives seeking to pad their pocketbooks,” Christian said. “This is ultimately investments made, and us paying the bill for those investments.”
Commissioner John Howard said while the rate increase was significant for customers, he felt if the proposal was voted down, it could result in even higher rate increases down the road.
“Quite honestly, I was coming here today to vote no. However, I came to the conclusion that action would have been best a noble romantic gesture,” Howard said. “I realized that the failure of this order would have put ratepayers at substantially greater risk.”
In a statement released shortly after the vote, Governor Kathy Hochul said she was pleased to see the PSC reduced the utilities’ initial proposal by 50%, but said she recognized the rates would still cause financial stress for many New Yorkers.
Hochul said $400 million was allocated in this year’s state budget specifically to provide assistance to New Yorkers experiencing high electric bills.