Is Fighting Rate Hikes a Waste of Energy?

By Holly Crocco

The conversation surrounding proposed rate increases for energy companies in 2026 is not going to die down anytime soon.

Patterson Town Supervisor Richard Williams shared with residents the latest information he has received from Avangrid – the parent company of New York State Gas & Electric, and Rochester Gas & Electric – during the July 9 Patterson Town Board meeting.

“I’ve had the opportunity to attend two or three meetings about this with the leadership of NYSEG,” he said. “Some things were very illuminating – to me anyway.”

While the company has filed for a one-year rate increase, which will raise its revenue $850.4 million, with $464.4 million going to NYSEG, it is looking to ultimately negotiate a five-year increase.

If the company is successful at securing a five-year rate increase, that would equate to a $17.3 billion revenue increase. As such, someone using 600 kilowatts of electricity each month would see their bill go from $140.29 to $173.41 – an increase of 23.6 percent, per NYSEG projections.

Williams said the company claims the one-year rate filing is to correct legacy issues, deficiencies in the delivery system including broken or deteriorating poles and malfunctioning equipment, and standard operation and capital expenses, as well as to pay for state policies.

According to Williams, 38 percent of a homeowner’s energy bill goes toward the supply cost, which NYSEG doesn’t make any money on. The delivery charge makes up 33 percent of the bill.

“One of the things that is a little disconcerting is… 20 percent of an electric bill actually is going back to the government, either in taxes or in mandated programs,” said the supervisor.

Of the proposed increase, the state would retain $234 million to go toward several initiatives, including phase one of the state’s Climate Leadership & Protection Act, geared toward reducing prosperous fuels and moving toward electrification; ready-to-support broadband expansion; and support for low-income customers and other programs

“There’s a state mandate program that they subsidize low-income customers, so a portion of your bill is actually being used to pay someone else’s bill as well,” said Williams.

In addition, per the state, NYSEG has to increase the number of full-time employees in its call center by 500, and abide by the Roadway Excavation Quality Assurance Act.

“The state is mandating that NYSEG, when doing any roadwork, now has to pay a prevailing wage,” explained Williams. “That’s going to increase cost of NYSEG doing any roadwork related to underground, elect service, or gas service by $40 million.”

Legacy issues, which total $379.5 million, include storm recover costs, arrears recovery, more timely recovery of reclaiming and danger tee expenses, and capital expenses to correct legacy under-investments.

“If a tree goes down (or) there’s a major storm that goes through, they have to restore power within 72 hours,” said Williams. “We get a storm rolling through like we did in May of 2018, I want to see how that’s going to work.”

NYSEG is also looking to make a change to its vegetative management operations.

“Currently in this area we are on a five-year trimming cycle,” said Williams. “If you go to upstate New York, their trimming cycle is roughly about 10 years, so they are looking to balance it off. But we would be on a more liberal trimming cycle.”

He expressed concern because the area has a lot of dead ash trees that need to come down, with beech trees now “becoming a problem.”

Other areas that will receive funding are customer care and digital enhancements.

“Really what they are looking to do is to leverage this one-year request into a multi-year investment,” said the supervisor. “It’s going to be a five-year rate plan, so they want to do this because they feel it will stabilize costs and better address some issues they have, and in doing so they will be able to reallocate some of the funding – so the corrective legacy activities will be taking more of a front seat.”

Williams said the company will need to make many infrastructure improvements to keep up with energy demands.

“I will tell you right now, in talking with NYSEG representatives, they do not have the capacity now to deal with the demand that they have,” he said. “So they’re going to need to make a very, very substantial investment in their infrastructure – new wiring, new poles – to meet the demand in the next several years.

“I sympathize with NYSEG in that a lot of this is being driven by state mandates that they have to implement,” continued Williams. “But this is the third double-digit increase that everybody has been handed in the last three years.”

Those past increases paid for smart meter installation, resilience in the system, upgrades to substations, and other costs.

“In the last rate increase that we saw they were saying it was going to be about $25 per household… Well, my bill went up a heck of a lot more than $25,” said Williams.

Harckham Slams Con Ed Rate Hike Proposal {subhead}

NYSEG isn’t the only energy company seeking a rate hike.

In testimony July 8 before the New York State Public Service Commission, State Sen. Pete Harckham, D-Peekskill, called Con Edison’s proposed double-digit rate hikes for gas and electric service as being out of touch with the reality of New Yorkers – many of whom are struggling to make ends meet.

“Con Edison’s proposal is tone-deaf and out of touch with the realities now facing working families and fixed-income New Yorkers,” said Harckham, who was testifying at one of four state PSC hearings on the Con Ed proposal. “Many New Yorkers are already struggling to pay rent, buy groceries, and afford basic healthcare. Inflation has stretched household budgets thin and higher utility bills will be the breaking point for many families.” 

The increase will impact more than 368,000 customers in Westchester and more than 3.6 million in the metropolitan area. 

Harckham said his office receives hundreds of calls and emails weekly about sky-high electric rates from ordinary folks, including seniors, who claim they cannot afford to pay them. Last winter, utility bills of more than $1,000 were not uncommon.

Last year, Con Edison reported profits of $1.82 billion, in line with its growing profits since 2019. The utility now proposes rate increases of 11.3 percent for electric and 13.4 percent for gas, which are expected to raise $2 billion a year in revenue.

If approved by PSC, the state’s utility regulator, the new rates would go into effect Jan. 1.

Harckham said that in its current rate case, Con Edison is requesting a return on equity of 10 percent, one of the highest in the nation for utilities, which means Con Ed expects shareholders to see generous returns – even as customers face rate hikes many cannot afford. 

He said that while investment in infrastructure is important and essential, customers should not bear the entire costs for the sake of profits. 

“I urge the Public Service Commission to reject this proposal because struggling New Yorkers cannot afford to foot the bill for corporate returns,” said Harckham.