Cahill Weighs In On Proposed Settlement between Central Hudson, Fortis and the Public Service Commission

January 29, 2013

Albany, NY – Assemblymember Kevin Cahill (D – Ulster, Dutchess) responded to the settlement agreement between Central Hudson and the Canadian-based Fortis, Inc., calling the customer benefit a “pittance” when compared to other major utility mergers and the contribution ratepayers have made to the value of the company. The settlement agreement details $50 million in customer and community benefits, including $5 million to be split between Ulster, Dutchess and Orange counties for economic development, $35 million to cover expenses “normally passed along to consumers” allowing for a one year rate freeze, and an estimated consumer savings of a purported $9.25 million over the next five years.

“The $9.25 million in savings pales in comparison to the $275 million in ratepayer savings the Public Service Commission required in 2009 in the sale of NYSEG and RG&E to the Spanish-owned utility Iberdrola,” said Assemblymember Cahill. “The Iberdrola settlement resulted in an average savings of $220 per customer. Central Hudson’s proposal comes in at around ten percent of that for each ratepayer they serve over the course of five years. In addition, Iberdrola was bound to an economic development package that included either a $200 million investment in wind power or a $25 million fund. That makes the average $1.8 million for each county for the Fortis/Central Hudson takeover.”

Cahill added, “While the settlement agreement completely demonstrates that both companies and the Public Service Commission are prepared to meet the duties a publicly traded corporation owes its shareholders, it falls woefully short of what is required of a monopoly utility to protect ratepayers and the communities they have been given an exclusive license to serve.”

On April 26, 2012, Assemblymember Cahill called on the Public Service Commission 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, especially considering the deep decline in state and independent resources for consumer protection.

“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.

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. The public comment period will close when the Commission votes to approve the acquisition on date to be determined.

“This settlement should not be approved unless and until ratepayers get a fair shake. A vote by the Public Service Commission to approve this proposal would clearly demonstrate that they have ignored their basic obligation to assure that their determinations are in the public interest, that consumer benefits outweigh potential detriment,” said Assemblymember Cahill. “The consumer protection apparatus of New York has been largely dismantled. If ever there was a demonstrated need to restore those agencies and organizations, this give away is Exhibit Number One. I will be reviewing potential further action to determine what can be done to assure ratepayers do not remain forgotten.”

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