ITHACA, N.Y. — The New York State Public Service Commission (PSC) unanimously approved large rate hikes for New York State Gas and Electricity (NYSEG) customers Thursday.
The seven member commission unanimously approved a 62% increase in NYSEG’s delivery rates for electricity, and a 17.8% increase for its gas delivery rate, which will become expressed in the utility customers bills over the course of the next 18 months.
Residential customers will see an average increase of $9.94 in their bill in November, then an average monthly increase of $8.84 in May 2024, according to the PSC. In May 2025, customers will see an average monthly increase of $11.34.
NYSEG’s residential gas customers will see an average monthly increase of $4.96 starting in November, a $2.13 increase in 2024, followed by an increase of $4.10 in 2025.
The vote to approveNYSEG’s double-digit rate increases follows months of mounting criticism for incorrectly billing its customers hundreds— sometimes thousands — of dollars, in addition to poor customer service.
Complaints about the billing issues spurred the Department of Public Service to launch an investigation into NYSEG in 2022. While the investigation is still ongoing, the company was strapped with over $15 million in fines in June for failing to meet any of the customer service standards set out for them by the PSC in 2022.
NYSEG’s service reliability is among the worst for utilities in the state. The frequency of the outages NYSEG customers have experienced on average over the last five years are the highest of any utility, according to the Department of Public Services 2022 Electric Reliability Performance Report.
NYSEG, along with Rochester Gas & Electric (RG&E), are owned by the Spanish multinational utility company Iberdrola through its subsidiary company, Avangrid. NYSEG serves around 1 million electric customers and 270,000 gas customers across the state.
Avangrid released a press release following the PSC’s decision Thursday. In it, Avangrid CEO Pedro Azagra is quoted saying, “This plan is an investment in the future reliability and resiliency of the New York grid.”
NYSEG and RG&E president and CEO Trish Nilsen stated that the rate increase will “allow us to make critical investments in our gas and electric infrastructure to improve reliability,” among other initiatives.
Officials and advocates have called for investments in reliability, but some believe that NYSEG hasn’t earned the rate increase they were granted, including Assemblymember Anna Kelles.
In an interview prior to the PSC’s vote to approve NYSEG’s rate increases, she said “the magnitude of the performance issues for NYSEG are stunning.”
Kelles has been vocal in opposing the rate increases given the utility’s performance deficits. She said in an interview that there “should be some baseline performance standard that the utility needs to reach to qualify for a rate case.”
Irene Weiser, coordinator of Fossil Free Tompkins who weighed in against NYSEG during the rate case, said in a press release Wednesday that NYSEG did not deserve a rate increase “until they provide better service.”
“If the PSC grants this rate increase, they will have lowered the standards for performance for all utilities,” she said prior to the rates being approved.
A rate case is a process used by utilities in the state to seek increases to the rates they charge. It is a highly technical, bureaucratic procedure that in some ways mirrors a court case, and is supposed to last for about 11 months.
In exchange for submitting themselves to a high degree of state regulation, private investor-owned utilities, like NYSEG, are able operate within a monopolized service-area.
The Public Service Commission’s decision Thursday brings to a close a rate case that began in May 2022, the same month Gov. Kathy Hochul called NYSEG’s initial rate increase request “outrageous and unacceptable,” and charged state regulators to “scrutinize every number and word” of the proposal.
Hochul was quoted in a statement Thursday, saying she was “pleased” with the deal the PSC reached with NYSEG, but added that she recognizes “the final electric rates are still likely to strain household budgets across New York.”
She highlighted the state’s Energy Affordability Program, noting that $400 million was secured to provide financial relief to New Yorkers experiencing high electric bills. The program, meant for low-income consumers, will see eligibility expanded to include “all median-income households,” Hochul said.
Members of the Public Service Commission noted Thursday that state regulators brought down NYSEG’s initial request. NYSEG initially proposed a rate increase that would have brought in an additional $447 million in profits in the first year of the three-year deal. The PSC touted in its press release that it was able to reduce this to $217.3 million.
The large rate increases, commissioners noted, are partially a result of the PSC slashing NYSEG’s last rate increase proposal in 2020 during the economic uncertainty caused by the COVID-19 pandemic.
“I do not take this vote lightly as the rate increases are larger than any of us would like to see.”Commissioner Diane Burman said Thursday.
She said the rate increases were “essentially created by the Commission’s last rate decision for these companies in 2020, which sought appropriately to take extreme measures to keep rates as low as possible at that time.”
The sharpest words among commissioners on the rate increase would be spent by.
Commissioner John Howarspent the sharpest words prior to voting on the rate case.
He said he intended “to vote no,” but came to the conclusion that doing so would have been “at best, a noble romantic gesture.”
There are “many legitimate criticisms” for NYSEG, Howard said. “Poor customer service, poor ongoing maintenance of the electric system, a myriad of billing problems and, I believe, a general callousness toward ratepayers. This service — these service territories are home to the greatest percentage of poverty in the entire state.”
RG&E and NYSEG, Howard said, “are just a small cog in a large Avangrid global machine.”
Howard said he could not “directly connect the foreign ownership to poor performance.” He described a “complete lack of contrition of the parent company” for NYSEG’s customer service failings in the last several years — an observation he said was “very troubling.”