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Power company blames bills on market


ANCRAM—About 30 people showed up at the Ancram firehouse Tuesday night, May 6 to find out why their Central Hudson electric bills skyrocketed in recent months.

The reason boils down to supply and demand, and it could happen again.

The Ancram Fire Company hosted the forum at the newly renovated and expanded firehouse.

Assemblymember Didi Barrett (D-106th), who helped make the forum happen, told the audience that Fire Chief David Boice came to her on her recent diner tour with a thick stack of electric bills belonging to people who were outraged by the price of electricity. Ms. Barrett said she contacted Central Hudson to ask them to “explain to us what they are doing.”

Central Hudson serves the towns of Ancram and Gallatin in Columbia County and also provides electric service to Dutchess County and many other parts of the Mid-Hudson Valley south of here.

Central Hudson Director of Media Relations John Maserjian explained that the price spike that occurred this winter was due to cold weather that enveloped a large part of the country. Invoking the now infamous “polar vortex,” Mr. Maserjian said the phenomenon created a demand for energy that strained the energy delivery system. He said delivery rates, which are regulated and set by the state Public Service Commission, did not change, but supply prices rose by 123% between January and March.

Supply costs reflect the energy–electricity and natural gas–used, and the price on the free market floats, varying from month to month. The supply portion represents 60- to 70% of a typical bill. Central Hudson passes the on cost of purchasing energy in a competitive market to customers without a mark-up. He said his company provides some measure of supply price stability for customers through hedging and buying practices.

Central Hudson uses income it receives from the delivery portion of bills to maintain and operate the electric and natural gas delivery system. Delivery rates have been relatively stable for more than a decade, and are adjusted through a formal ratemaking process. Delivery charges represent 30 to 40% of a customer’s total Central Hudson bill, according to information on the company’s website.

Mr. Maserjian said natural gas is used for heating and electric generation and while there is plenty of natural gas, there is limited pipeline capacity to transport it. One way to address cost, he said, it is to expand gas and electric infrastructure to allow power to flow more freely.

Another factor impacting Central Hudson customer electric costs is the new Capacity Zone. The Federal Energy Regulatory Commission (FERC) has imposed the zone to address growing energy shortfalls downstate. Mr. Maserjian said the zone “will artificially raise prices by restructuring the way utilities purchase electricity.”

Using a state map made up of different colored “electric grid load zones,” Mr. Maserjian pointed to bottlenecks north of the Mid-Hudson Valley in the transmission system that provides energy to the southeastern portion of state. Central Hudson’s service area is lumped in with the southeast New York and greater New York City area in the zone, “which forces utilities serving the area to purchase virtually all their energy capacity within that zone only, rather than throughout the rest of the state,” according to Central Hudson’s website.

The theory behind FERC’s enactment of the zone is that “higher prices will attract generators to help address the shortfall,” said Mr. Maserjian, who noted it is Central Hudson’s stand that it makes more sense to fix transmission problems rather than impose estimated bill increases of 6% on Central Hudson residential customers and 10% on industrial customers and provide a windfall to existing generators.

Mr. Maserjian said Central Hudson opposes the Capcity Zone, which went into effect May 1, and has filed a motion asking FERC to cancel implementation of the zone and consider other options.

Ancram resident Donna Hoyt, a Central Hudson customer who has opted to purchase her power through an independent electric service company, has seen her business electric costs double and her home costs triple. “Why have we never seen this before?” she asked.

“Something happened that was unprecedented,” Mr. Maserjian said, noting both FERC and the Federal Trade Commission have been urged to investigate. He said in a follow-up phone call that there is a possibility that the same conditions could provoke a repeat price spike occurrence.
Central Hudson representative Alana Mikhalevsky told Mrs. Hoyt to contact the Public Service Commission, which will act as her advocate in a rate dispute.

Teresa Leske spoke about the wide range of assistance programs Central Hudson offers customers who are having trouble paying their bills. Visit the Central Hudson website, www.centralhudson.com, for more information or contact Ms. Leske at 845 486-5742.

James Kopp, outreach coordinator with the Rural Ulster Preservation Company, which contracts with the New York State Energy Research and Development Authority to provide energy solutions, told the audience about how people could get home energy audits to determine the energy efficiency and safety of the homes, a service provided for free in many cases. He said consumers will receive a report detailing work that will make their homes more energy efficient but are under no obligation to do anything about it.

But, he said, such improvements can “affect your health, safety and comfort, the durability and long term value of your housing and have environmental benefits.” He can be reached at 845 331-2140 X 261 or 267.

To contact Diane Valden email dvalden@columbiapaper.com.


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