Will the Hudson Valley Power Authority Actually Lower Energy Costs?
The proposal for the state to buy Central Hudson will change who sends out the electric bill, but it won’t change the underlying causes of rising energy costs for families and businesses.
A Public Takeover Won’t Lower Costs – It Introduces New Risks
Energy costs have been going up everywhere, and the 350,000 households served by Central Hudson have been no exception. Local activists are pushing for the Hudson Valley Power Authority (HVPA) as an alternative to investor-owned utilities. They claim it will lower rates, increase reliability, and improve renewable energy adoption.
The truth? Their plan is deeply flawed, and at best, would result in a lost decade of bureaucratic jockeying and confusion. At worst, it could create a firestorm of affordability, labor and governance issues that ratepayers and local governments would be on the hook to pay for.
Don’t be misled by the hype. Here’s what you need to know before your city council or town board considers a resolution in support of HVPA.
Problem: Changing Ownership Won’t Bring Affordability
HVPA proponents often cite Massena, NY and Ontario as communities that have low electricity rates because of public power.
The problem is that example is not remotely applicable to us in the Mid-Hudson Valley.
Massena is a densely populated town of 11,000 people in 44 square miles, and home to the Moses-Saunders Power Dam, a massive 912 megawatt power plant that far exceeds the power consumption of the local population.
By comparison, Central Hudson serves at least 700,000 people spread out across 2,600 miles.
Despite having public power, Massena and other municipal utilities still send out shocking bills to customers, and face the same unfunded state mandates that investor-owned utilities face. In December, it was revealed that Massena and 11 other New York municipal utilities may see their electricity rates nearly triple; public power administrators attributed the hike to an “expansion into public renewables.”
Meanwhile, Ontario’s power is cheap because they generate massive amounts of nuclear and hydroelectric electricity, as part of a “pro-growth agenda that takes an all-of-the-above approach to energy planning… rather than ideological dogma.” They generate so much energy that they export a sizable portion of it to New York State.
The coalition that wants to take over Central Hudson does NOT advocate for a pro-growth, “all-of-the-above” approach to energy; the bill’s author actually wants New York State to run on 100% renewable energy, primarily wind and solar.
Counter to claims of an “energy democracy,” the HVPA bill calls for funding a study to justify the retirement of natural gas infrastructure. The takeover is a means to an end of shutting down service for Central Hudson’s 90,000 natural gas customers, no matter what their actual wishes may be.
Central Hudson’s Workers Are Being Ignored
While the media has eagerly publicized the climate activists and college professors that want to take over Central Hudson, the thoughts of Central Hudson’s unionized workforce have been an afterthought. Listen to Steve Carroll, President and Business Manager of the International Brotherhood of Electrical Workers, Local 320, which represents hundreds of Central Hudson workers:
“If these concerns are apparent on the surface, what deeper issues remain undiscovered? Much of HVPA’s financial model relies on grants and other funding sources that are not fully secured. In a recent Kingston City Council vote, a council member admitted to concerns about cost but still voted in favor, hoping that the state would “find a way” to keep municipalities financially whole. Relying on hope rather than facts is deeply troubling.
I urge you to critically examine this proposal and not be distracted by the flashy promises used to sell it. If something sounds too good to be true, it often is. Instead of being swayed by unverified benefits, we must demand clear, fact-based answers to the real economic and operational concerns surrounding HVPA.”
Community: Hudson Valley Leaders Weigh In
“This… is a slap in the face to the workers who build and strengthen our energy system. Central Hudson consistently invests in modernizing infrastructure to prevent outages and improve reliability -work that keeps local residents employed on critical projects and the grid resilient. A government-administered electric and gas utility means fewer jobs for local workers and a less reliable system for everyone.”
Todd Diorio
Hudson Valley Building & Construction Trades Council
“Rate payers would be facing enormous power bills. They would bear an enormous burden of paying again for an existing system.”
Michael Hichak
Executive Board Member, International Brotherhood of Electrical Workers
Central Hudson has a proven track record as demonstrated by their well-coordinated and timely power restorations in the aftermath of severe storms. Central Hudson was recently recognized by the Edison Electric Institute, a prominent electric utility trade organization, for their timely and exceptional response to a major ice storm, winter storm Landon, which impacted much of Ulster County in February 2022.
For these reasons and more, the Ulster Chamber Board of Directors opposes the creation of the Hudson Valley Power Authority.
Alex Ibarra
Chair, Board of Directors, Ulster County Regional Chamber of Commerce
“Workers who go to work every day are being harmed by this bill. I think they know. I put my faith in people who go to work every day like that and who they want to work for.
Richard Parete
Town of Marbletown Supervisor
Frequently Asked Questions
In a meeting with the Kingston Common Council, the author of the bill claimed that the Center for Public Enterprise created a memo that estimated a $1.2B price tag for the acquisition. However, that estimate has not been shared with the public, and a FOIL request for the memo was denied.
The HVPA claims that the acquisition will be financed using bond debt, meaning that ratepayers (not taxpayers) will bear the cost. However, that simply means that the acquisition is going to be repaid through residents’ energy bills; a mandatory payment much like a tax. The costs are ultimately borne by residents; surcharges or even additional payments from local governments may have to be used to pay the full costs.
In Ulster County alone, Central Hudson is the second-largest taxpayer, so making sure that taxes are still paid is of utmost importance. Although the bill states that the HVPA will make payments-in-lieu of taxes (PILOTs) equal to what municipalities would have received, PILOT agreements can change over time. If the HVPA struggles financially, or there is political pressure to not raise rates, PILOTs could be re-negotiated to relieve pressure. There is no guarantee that PILOTs will be permanent, automatic, and equal to property taxes indefinitely.
The Long Island Power Authority recently challenged assessments on its property.
When asked about this, Assemblymember Shrestha’s Chief of Staff Ben Wolcott said that they don’t know how this bill will affect rates.
“One thing that’s a little unclear, and I think it’s a little challenging to model, is how much your rates would go down relative to what your rates would do if we stayed with Central Hudson. And over what time period the savings you would see… how much your rates will change over time is harder to model.”
-Ben Wolcott, Assemblymember Sarahana Shrestha’s Chief of Staff
It is true that maintaining a small profit margin while servicing debt for Central Hudson is part of our utility costs. But public utilities sometimes struggle with credit ratings in their early years, meaning HVPA could face higher borrowing costs than assumed.
The American Public Power Association and Large Public Power Council recently wrote that public power utilities struggle with financial uncertainty, can no longer access energy tax credits under the Inflation Reduction Act, and are lobbying for changes to IRS rules. Public utilities, just like private ones, face economic pressures, borrowing constraints, and operational risks, which create pressure to negotiate PILOTs, raise rates or defer maintenance.
The proponents of the HVPA often use the term “energy democracy” to describe their ideal utility. But given that the HVPA does not have the support of the actual unionized workers who currently do all of the work for the utility, that term rings hollow.
HVPA’s leadership structure, which could have engineers and experienced utility experts outnumbered by climate activists, college professors, and indigenous rights and environmental justice experts, could result in the utility being mismanaged, leading to higher than expected costs.
Some of the HVPA’s proponents are the same people and groups who crafted former governor Andrew Cuomo’s Climate Leadership and Community Protection Act (CLCPA) in 2019, and then pushed for the premature shutdown of Indian Point Energy Center, which caused energy costs and emissions to skyrocket.
The bill’s proponents have also testified to the New York State Public Service Commission that natural gas infrastructure is a “stranded asset”, and protested against routine natural gas infrastructure maintenance; Central Hudson serves close to 90,000 natural gas customers across the Mid-Hudson Valley. While everyone is free to choose what they want to use for their home heating and cooking systems, it is irresponsible to not maintain natural gas infrastructure that is vital for hundreds of thousands of people to stay warm in the winter.
The push for public ownership of utilities among New York socialists has drawn significant criticism for ignoring labor and the workers who actually run the energy system.
Sandeep Vaheesan, a key thought leader in the movement for energy democracy, argues in his book Democracy in Power that the U.S. electricity system is controlled by monopolistic private interests and should be replaced by public power. However, even within the public power movement, ideological allies have raised serious concerns that Vaheesan and his followers prioritize NGO-led environmental activism over the workers who actually operate the grid, leading to flawed governance structures that don’t center technical expertise.
Instead of ensuring that experienced energy workers have a meaningful say, the DSA model of “energy democracy” would pack leadership boards with environmental activists and community groups, sidelining the engineers, lineworkers, and system operators who keep the lights on and the heat running.
When socialists say that “labor is the source of all wealth,” but ignore actually existing labor unions, it’s a recipe for dysfunction. If the movement’s own ideological allies see the flaws in this plan, why should Hudson Valley ratepayers trust it?
A Better Path: Fixing New York’s Energy Policy
Dutchess County, which represents a plurality of Central Hudson customers, has been a respondent to Central Hudson’s recent rate cases.
While the county has not spared Central Hudson’s management any criticism for their well-documented billing issues, they correctly identified the provable, cited cause of the rate increases: the unfunded mandates of Andrew Cuomo’s nation-leading Climate Leadership and Community Protection Act.
While many New Yorkers want cleaner energy, the bill was written irresponsibly: it forces the early retirement of vital sources of energy, it mandates an extreme expansion of renewable energy (causing land use issues such as in the Town of Ulster), it introduces new hidden taxes, fees and surcharges that were written to be passed directly to the consumer, and it mandated an immediate, high-cost overhaul of the grid.
Dutchess County’s testimony supports the argument that reforming state climate policies—rather than creating a public power authority—would have a greater impact on lowering energy costs for ratepayers. The testimony reinforces that the financial burden of the energy transition, as dictated by the CLCPA, is the key issue at hand. Therefore, addressing affordability within the framework of replacing the CLCPA is a more direct and effective way to address energy costs than a government takeover of Central Hudson, which may take up to ten years and has no guarantee of lowering costs.
Instead of seizing utilities, the state should:
- Repeal or reform the CLCPA to incentivize a pro-growth mix of energy sources, including natural gas and nuclear, to maintain affordability.
- Invest in energy reliability in a measured way rather than solely emphasizing decarbonization.
- Hold utilities accountable through stronger regulatory oversight, not by blowing them up and replacing them with an untested bureaucracy.