Cahill Weighs in on Central Hudson Acquisition Calling Ratepayer Benefit Proposal Inadequate

Letter to Public Service Commission calls for strong customer protections; decline in consumer advocacy requires enhanced level of scrutiny

April 26, 2012

Albany – Assemblymember Kevin Cahill (D – Ulster / Dutchess), Chair of the Assembly Energy Committee released a letter to the Public Service Commission in response to the petition filed by Central Hudson regarding acquisition by the Canadian-based entity, Fortis, Inc. He called the proposed $10 million customer benefit fund “a pittance” when compared to other major utility mergers. He demanded the inclusion of stronger ratepayer protections if the transaction is allowed to move forward.

“The so-called $10 million community benefit fund should be renamed the shareholder protection plan. It pales in comparison to the $275 million in ratepayer savings the Public Service Commission required the last time a major utility changed hands in New York,” said Assemblymember Cahill, referring to the 2009 sale of NYSEG and RG&E to Iberdrola, a large Spanish owned utility. “The Iberdrola settlement resulted in an average savings of $220 per customer. Central Hudson’s proposal is not even in the same ballpark, coming in at less than $35 for each ratepayer they serve. This is little more than a rounding error,” Cahill said.

In addition to objecting the inadequate benefit fund, the letter noted the deep decline in state and independent resources dedicated to consumer advocacy. Assemblymember Cahill called on the Commissioners to pay special attention to the impact the transaction would have on Central Hudson’s customers and demanded the inclusion of strict accountability measures before the acquisition is approved.

“In similar circumstances in the past the Consumer Protection Board, the Citizens’ Utility Board and the Public Utility Law Project fought for and won significant concessions for residential and low-income ratepayers. Unfortunately those important groups have been dissolved and de-funded leaving the average citizen without a voice during this process,” said Assemblymember Cahill. “If the sale is approved, the Public Service Commission has an even greater obligation to fill the void by demanding the inclusion of substantial consumer benefits and ensuring that Central Hudson customers receive fair and equitable treatment.”

The Assemblymember also called upon the Commission to require specific workforce commitments, detailed plans for infrastructure upgrades and accountability measures designed to prevent Central Hudson ratepayers from subsidizing other Fortis operations.

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