Cahill Calls for Action from Public Service Commission

Central Hudson acquisition by Fortis Inc. pales in comparison to previous mergers

February 22, 2013

Kingston – Assemblymember Kevin Cahill (D – Ulster / Dutchess), testified on Thursday, February 21, 2013 at Kingston City Hall in front of Administrative Law Judge David Prestemon regarding the petition filed by Central Hudson concerning acquisition by the Canadian-based entity, Fortis, Inc.

“The so-called $10 million community benefit fund should be renamed the shareholder protection plan. It does not come close to the $275 million in ratepayer savings the Public Service Commission required the last time a major utility changed hands in New York,” said 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.

“I urge the Public Service Commission to demand inclusion of stronger ratepayer protections if the transaction is allowed to move forward,” Cahill said. “The proposal, as is, clearly shows that Central Hudson is prepared to meet the fiduciary duties a publicly traded corporation owes its shareholders but falls short on its responsibility to consumers and the communities they have been given a license to serve.”

In his testimony Cahill mentioned similar circumstances where 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,” Cahill said. Also noted was the fact that Utility Intervention Unit of the New York Department of State issued a statement in support of the merger. “I believe this to be the direct reflection of the lack of staffing in the State Department,” Cahill said.

Cahill added, “Dealing with a Canadian owned entity adds to the uncertainty for ratepayers due to the North American Trade Agreement (NAFTA), which can make regulation much more difficult.”

“The current proposal deserves a comparable level of scrutiny and conditions to ensure the interests of Central Hudson ratepayers are protected,” Cahill said. “In addition, any order of approval should require specific workforce commitments, detailed plans for infrastructure upgrades, a substantial increase in the proposed consumer benefit package and accountability measures designed to prevent Central Hudson ratepayers from subsidizing other Fortis operations with an emphasis on bankruptcy protections.”

Assemblymember Cahill urges consumers to weigh in with the Public Service Commission. Comments can be sent to Empire State Plaza, Agency Building 3, Albany, New York 12223-1350 or emailed to Hon. Jeffrey C. Cohen, Acting Secretary, at secretary@dps.ny.gov. Comments should refer to "Case 12-M-0192 - Central Hudson/Fortis Merger.” All comments should be submitted no later than March 22, 2013.

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