No One Likes a Rate Hike but the “Greedy Utility” Ain’t To Blame

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As our utility rates for gas and electricity increase due to irrational energy policies, those who pushed them will try to obfuscate their role. One way this is done is their focus on rate case advocacy and the demonization of the different Utilities in New York State (Con Ed, Central Hudson, National Grid, etc.). Many of these groups such as AGREE, PULP, WE ACT, and their aligned politicians make opposing rate increases a staple of their work (when they bother to show up to their appointed time). While smart from a PR standpoint (you would be hard pressed to find anyone who wants to pay more for anything) this is only a deflection of blame that focuses on the symptoms and not the cause.

For those who do not know how this all works, Utilities are monopoly companies that own and maintain the power and/or gas lines and deliver gas and/or electricity to ratepayers (i.e. us). Because they are monopolies for historical and logistical reasons, they are regulated by the state, in NY the Department of Public Service, or PSC.  In order to charge more for their services the Utilities must ask the PSC for permission to increase rates. Hence, the rate case. Rate increases are usually justified by spending on capital projects, thus long term capital is incentivized. 

When you first hear the green groups talk about this system it seems like they would agree with the critique others have made about it. Namely, that Utilities have no incentive to control rising costs as they get paid more the more they spend on infrastructure, leading to projects that should decrease overall rates (such nuclear power plants or gas pipeline expansions) actually increasing them. However, they pivot away from this and focus on their true goal: the total destruction of our reliable fossil fuel infrastructure (they state as much within the first 4 min of their  Rate Case 101 video). 

These groups have worked hard to make sure reliable infrastructure is not only impossible to build here in the state but is actively torn down. From Storm King to Indian Point our Utility infrastructure has become fragilized because of their actions. And this fragility increases our costs. They admit as much, as seen in the following quote taken from the transcript aforementioned video (emphasis my own):

and so I saw some questions in the chat there was a question a lot earlier about how weather impacts your rates and I’d like to just briefly talk about that and and then we’ll go to some of the other questions but weather impacts utility rates in a lot of ways our utility rates are especially affected because of our reliance on fossil fuels so because we are reliant on fracked gas right what they call natural gas but what we know is really just methane and is very bad for your health we rely on global markets that are volatile you know the price goes up and down and we have to deal with that fluctuation we’re not protected right uh the price of fracked gas increases and decreases while solar is always free and so you know we know that a fossil fuel future is not consistent with one that has energy affordability

Ignoring the misleading take that solar energy is free, it is absurd to point to the fluctuations in market prices without addressing why those prices fluctuate so much. Who are the ones to block pipelines, stop natural gas extraction, and in general make the cost of doing business in the fossil fuel industry so high? If we were able to extract more fuel and transport it more readily these costs would go down. This is where the obfuscation happens. As I mentioned before, in NYS Utilities are only responsible for the delivery, not the generation, of gas or electricity. They do not control the price of generation, and they have said as much. Central Hudson directly blamed the closure of Indian Point for an obscene electric rate spike in February 2022. In much better news, National Grid predicts lower home heating prices this winter due to increased production of gas and lower overseas demand. By solely blaming the Utility in the public rate cases these green groups get to gain brownie points from people who rightfully are outraged at rate increases while being able to wash their hands of the fact that they led to this situation of higher overall prices in the first place. 

It should be noted that this is not a blanket defense of these Utility companies. While listening to many recent rate cases posted on the PSC YouTube page it was very apparent that these companies do have problems in area’s like billing and customer service. However, as the rubber hits the road and our grid becomes more costly and unreliable we cannot let those who caused it pass the buck and use the situation to further the collapse. The so-called environmentalists are the ones causing your rates to go up, not the Utilities, and we would do well to remember that.