Central Hudson Seeks to Increase Electric and Gas Rates

Two public hearings will be held by the state Public Service Commission on proposed increases to Central Hudson electric and natural gas rates.

The utility is looking for $67.2 million in revenue over three years for improvements to electric and natural gas infrastructure, with $36 million furnished by rate-payers and the remainder offset by bill credits provided by Fortis as part the deal it made when it acquired Central Hudson in 2013 and other balances.

According to a bill comparison provided by Central Hudson, an average customer can expect to see their monthly electric bill increase by around 10 percent and gas bill by 5 percent over the three-year plan.

How the rate increases will affect individual customers depends on their usage, the time of year and the market price of electricity which Central Hudson (or their energy service provider) purchases from producers.

Bills are divided into supply and delivery charges. Supply varies based on the market price of natural gas and electricity. The proposed increases affect the delivery charges. To illustrate the electric increases, Central Hudson uses the bill of an average residential customer, which it says uses 610 kWh per month. For that customer, the bill would increase in stages from $111.12 now to $123.81 in year three, all else being equal. (The stages are as follows: 1.04 percent in year one, 4.68 percent in year two, 4.54 percent in year three.)

For the average residential natural gas customer, the bill would decrease by .14 percent in year one, and increase by 1.13 percent in year two and 4.21 percent in year three.

The proposed rate increase is part of what's termed a "joint proposal," so called because it was filed by Central Hudson as well as several other interested parties, including: Department of Public Service (DPS) Staff, Central Hudson, the Retail Energy Supply Association, the Pace Energy and Climate Center, and the Sabin Center for Climate Change Law at Columbia Law School.

One organization that did not sign on was Rosendale-based Citizens for Local Power, which objected in particular to the increase in the flat monthly hookup charge from $24 to $29 for electric service, which would disproportionally affect smaller customers. (Though it should be noted that the bill credits will blunt the impact. For example, the average electric customer would pay $1.16 more per month in year one despite the hookup charge increasing by $3.)

Central Hudson originally applied for the rate increase in July 2014. According to the PSC, the company said it needed additional revenue to offset sales reductions, fund environmental clean-up costs, and to pay for local property taxes, higher operating expenses due to inflation, and increased expenses associated with new infrastructure investment. If approved, the rate increase would be effective July 1, 2015.

According to PSC, the joint proposal would:

• Establish a major storm reserve for electric operations
• Establish a same-day reconnection program in which the company will strive to achieve not less than 80 percent reconnection within the same day
• Establish an incentive program through which the company could receive a positive revenue adjustment if terminations for residential customers are held below 11,000 per year
• Make more stringent the electric reliability and gas safety performance metrics applicable to the company
• Continue and expand the company's program for the replacement of leak prone pipe and provide a positive incentive if replacement levels are greater than the annual targets
• Convert customers to monthly billing
• Create a $1 million per year program to incent the conversion of customers to gas service
• Establish a Reforming the Energy Vision Working Group to develop demonstration projects for consideration by the Commission through Case 14-M-0101 and related cases.