ITHACA, N.Y. — When the two utility companies New York State Electric & Gas (NYSEG) and Rochester Gas and Electric Corporation (RG&E) announced the rate increase they would be seeking from state regulators in May 2022, Governor Kathy Hochul reacted saying that the price jumps were “outrageous and unacceptable.”

Hochul urged the Department of Public Service (DPS) to “scrutinize every number and word” brought forward by NYSEG and RG&E— both subsidiaries of Avangrid — as they make their case for why the rate increases are needed. The companies are asking state regulators to allow them to draw a combined $430 million more in revenue from the 1.3 million customers they serve across New York State. 

The average RG&E gas customer would see a 18.8% increase in their gas bill, and a 21% increase in their electricity bill . The average NYSEG customer  would see a 14.9% increase gas bill, and a 34.9% increase in their electricity bill.

Now, six advocacy organizations are formally asking state regulators to dismiss the request altogether. On Wednesday, the advocacy groups filed a motion in NYSEG and RG&E’s rate case that highlights numerous instances in which DPS staff stated that both utility companies provided “vague, inconsistent answers, or failed to provide necessary documentation.”

“The legal standard is that when you file a rate case, you have to provide the specifics of your historical spending and how you arrived at your projections. And the law is very clear that the burden of proof is on the utilities to do all of this. And our assertion is that they didn’t meet that burden of proof,” said Irene Weiser, coordinator at Fossil Free Tompkins, one of the organizations that has filed the motion to dismiss.

Moreover, advocacy groups are arguing for a dismissal of the company’s rate request not just on the basis of shortcomings in the filings. NYSEG and RG&E customers have also faced systemic billing issues in recent months — an issue which is the subject of an ongoing DPS investigation.

Weiser said, “The idea that the public should be asked to pay more money to this company right now that can’t even manage their billing, and get their finances straight — why in the world would any customer be willing to give them more money now?”

Avangrid did not immediately respond to The Ithaca Voice’s request for comment.

The current rate increase that NYSEG and RG&E are asking for is only about $18 million less in annual profit than what the companies had asked for in May, when Hochul initially reacted. And the motion to dismiss from advocacy groups comes as state regulators are supposed to come to a decision on what rate increase to grant to NYSEG and RG&E in just a few months time. 

Utility companies in New York State operate as state sanctioned monopolies. In return for having the claim to service certain geographic areas with gas and electric at a guaranteed profit, those companies must open their books, and submit themselves to a high degree of regulatory oversight. That oversight is administered by the New York Public Service Commission (PSC), which is a part of DPS.

In response to a request for comment, DPS Public Information Officer James Denn stated to the  Voice that “The motion will be reviewed. The Department will continue to vigorously and thoroughly vet the companies’ request for a rate increase and work tirelessly to eliminate any unnecessary expenses and constructively engage with other parties to consider how best to advance the public interest.”

Denn emphasized that Hochul has continued to support bill payment assistance programs as governor. 

NYSEG, RG&E, and state regulators have eight days to respond to the dismissal motion.

The motion to dismiss is built on numerous instances of DPS staff testifying that NYSEG and RG&E provided inadequate proof to state regulators.

In their rate case, NYSEG and RG&E requested their rate increase to help afford over $1.3 billion in capital expenditures to be spent between 2022 and 2026 on transmission projects associated with New York’s landmark climate legislation, the Climate Leadership and Community Protection Act (CLCPA). 

The $1.3 billion request is $369 million greater than what state regulators recommended that NYSEG and RG&E spend on CLCPA transmission projects between 2022 and 2026. Despite the jump, staff at DPS say that the companies did “not provide sufficient documentation to support the increased budgets.”

Regulators also testified that NYSEG and RG&E requested to increase the budget of a program to replace the poles, insulators and cross arms along their transmission system, from $14.5 million in 2022 to $174 million by 2026. But NYSEG and RG&E did not provide a list of the projects that they are aiming to work on, or how the budget was ultimately forecasted, according to testimony from DPS staff.

“NYSEG is asking for a very big rate increase,” said Jessica Azulay, Executive Director of Alliance for a Green Economy and one of the parties in the dismissal motion. “And if they have any respect for their customers, and for the rate case process, they need to substantiate that, and really demonstrate why it’s necessary to increase the bills of their struggling customers,” 

There is a need for utilities to make major investments in their infrastructure and operations to meet the state’s climate goals. Among the marquee goals of the CLCPA are for New York State to achieve an 85% reduction in greenhouse gas emissions statewide by 2050, and a 40% reduction by 2030. 

“We want the utility to be able to move forward with climate progress,” said Azulay. “But we don’t want it to happen in a way that’s price gouging customers, and so it’s really critical that […] the utility substantiates why it’s asking for so much money.”

DPS is currently investigating NYSEG and RG&E for systemic issues billing customers. Anecdotally, customers have shared that they’ve seen bills from the utility companies that seem to be off by hundreds of dollars or not receiving bills for months. Resolving the issues have proven frustrating, ascalls to customer service have left some waiting on the line reportedly for hours. 

During a virtual public forum on January 31, Mary Eddy, who resides in Chemung County and is a NYSEG customer, said that she had been having trouble with the utility company for over a year. She shared that she had stopped receiving bills in January 2022, and was unable to access the utilities’ online payment system. However, between January and June of 2022, she was able to pay her bills on two occasions after calling NYSEG’s customer help line and using her debit card, and once by paying with a check.

Eddy said that access was restored to her account in June 2022, when she would learn that she was being faced with a massive, surprise charge. 

“They said I owed $665.72 with no valid explanation — still hadn’t received any bills,” Eddy told DPS.

Despite having paid her bills on time, Eddy said she was being hit with late charges on her utility bills from March through July 2022 — bills which she said she only received in the mail in August. 

“They wanted me to send payments on a bill that I wasn’t even receiving,” Eddy told DPS.

What Eddy shared was emblematic of the other experiences shared to DPS during the January virtual forum.

Laurie Wheelock, the Executive Director and Counsel of the Public Utility Law Project (PULP), said “It’s concerning that NYSEG and RG&E is seeking such a large rate increase at the very same time they’re being investigated for widespread billing issues.” 

PULP has also signed onto the dismissal motion. Wheelock said that “PULP believes that it’s important to pause and ask what fiscal responsibility measures they’re willing to take while asking the public for a double-digit rate increase?” 

The dismissal motion is asking for state regulators to require NYSEG and RG&E to institute austerity measures, which they suggested could include reducing or completely suspending dividends paid to the utilities’ shareholders and parent company, reducing employee overtime, and other measures. 

The argument for these austerity measures, Azulay said, is “because we can’t just keep going around business as usual where the utility asks for a rate increase, and continues to ask for a high return on equity. And just passes all of its costs and all of its profits on to the customers instead of sharing the burden with the  communities that it serves.”

The rate that NYSEG is seeking from state regulators is to achieve a 10.2% return on equity for the company, according to a credit analysis from Moody’s that the company filed with DPS. The analysis also stated that the current rate case is “extremely important to the credit trajectory of the company.”

State regulators are in a position where they must balance the interests of ratepayers and the financial viability of the utility which are, in a sense, entwined. The financial health of a utility, while it benefits shareholders and parent companies, can also be a benefit for customers.

“There really is this ideology that is totally embedded and enmeshed in the entire regulatory structure, that what would be good for the financial health and stability of the company is good for customers,” Azulay said

It’s standard for the rates that utility companies request to be dramatically lowered by regulators by the end of the rate case process — all done in the name of keeping utility bills affordable for New New Yorkers. But with scores of documents absent in NYSEG and RG&E’s filings, advocates are arguing that state regulators risk making an arbitrary decision on what rate increase they grant the utility companies.

“Without this information, it’s just — I don’t see how the [Public Service Commission] can balance and make decisions on all of these needs that customers in the state have, and at the same time, control the costs of the utility,” said Azulay. 

To maintain the interests of the public, it all points to one thing for advocates.

Azulay said, “Why are they experiencing such hard billing issues? Why is their filing not up to snuff? It’s very concerning. And that’s why we’re asking, let’s dismiss this particular filing and ask them to go back and get their ducks in a row.”

Correction: This story originally reported that the average RG&E gas customer would see a 10.9% increase in their gas bill, and a 14.9% increase in their electricity bill. The average NYSEG customer  would see a 10.8% increase gas bill, and a 22.2% increase in their electricity bill.

Jimmy Jordan

Jimmy Jordan is a general assignment reporter for the Ithaca Voice. Questions? Story tips? Contact him at Connect with him on Twitter @jmmy_jrdn