NYSEG: Service and rate concerns around Sullivan

By SOMAR HADID
Posted 9/30/20

Editor’s note: In the first of a series of stories about New York State Electric and Gas Corporation (NYSEG), writer Somar Hadid takes a look at the history of NYSEG, their service …

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NYSEG: Service and rate concerns around Sullivan

Posted

Editor’s note: In the first of a series of stories about New York State Electric and Gas Corporation (NYSEG), writer Somar Hadid takes a look at the history of NYSEG, their service record and application in front of the Public Service Commission for approval of a 27 percent rate increase over three years.

NEW YORK STATE —  If you’re a resident of the Sullivan County area, you probably know of NYSEG as your main utility company. You also know that sometimes, severe winter and tropical storms hit the area and losing power can be a major concern for you, especially if it is a prolonged shortage.

What you might not know is that NYSEG is part of a large multi-national corporation that dominates the gas and electric markets across New York State. So here’s some background.

NYSEG is one of eight subsidiaries owned by Avangrid, a Connecticut company that serves around 3.1 million consumers in New York and other parts of New England. Avangrid is 80-percent owned by Iberdrola, a multinational electric utility company based in Bilbao, Spain that acquired NYSEG and Rochester Gas and Electric in 2008.

Once a local company, NYSEG was founded in 1852 as the Ithaca Gas Light Company. It enjoyed a good reputation for providing reliable electricity and good service, with linemen living in the communities they served. However, throughout its years, it has undergone a series of mergers and acquisitions to acquire and amalgamate roughly 200 local utility companies under the NYSEG name. NYSEG has previously operated several diesel- and coal-powered plants located in Broome, Yates, Tompkins and other counties in and around central and upstate NY. In 1975, it became a partner at the Nine Mile Nuclear Facility near Oswego, NY. The company also owned a series of hydroelectric power plants.

Recently, NYSEG has come under scrutiny from local lawmakers for its service standards. The towns of Highland and Tusten have dealt with hundreds of power outages, prompting Sullivan County Legislative Chair Rob Doherty to voice his concerns during a February business meeting with NYSEG representatives, Doherty noted the 100-plus power failures in his district and urged the company to address the issue.

District 2 legislator, Nadia Rajsz, representing Lumberland and parts of Mamakating, delineated the fact that these power outages can affect citizens working from home or those dependent on medical equipment.

NYS Senator Jen Metzger (NY-42), has likewise voiced her concerns about NYSEG’s services.

“NYSEG has consistently under-invested in preventative maintenance for reliability, which worsened the severity of impacts of the March 2018 winter storms and has also contributed to a high frequency of power outages in my Senate district more generally,” Metzger said in January.

During the winter storms of 2018, power outages stretched on for days. Metzger said that NYSEG is one of the only major U.S. corporations to not have a regular and periodic vegetation management team to deal with any loose limbs and branches that can fall and cause power outages. Over the years they have reduced their linemen and tree trimming staff and outsourced the work to private contractors.

Other areas of concern that Metzger points out include underinvestment in distribution infrastructure and a general lack of investment to maintain and support energy delivery in the area.

To add fuel to the fire, NYSEG is seeking a 27-percent increase in electric rates, specifically the electricity delivery charges, over the next three years. This is more than triple the rate of other major New York utility companies such as Orange & Rockland or Central Hudson, she said.

In her comments to the Public Service Commission, Metzger emphasized that about 80 percent of the households she represents fall under the U.S median household income. 

On the credit side, NYSEG has offered a $100 credit line to households hardest hit by the pandemic. However, the senator said that this one-time credit will not offset the adverse effects caused by the rate increase. 

Part of the proposed increase is slated to increase the amount of remuneration paid to shareholders, something that Metzger suggested that NYSEG could reject. This would potentially reduce the proposed 8.8 percent guaranteed annual rate of profit for utility shareholders.

Sullivan County Manager Josh Potosek also made comments regarding NYSEG’s proposed rate increases in a letter to the Public Service Commission.

“The proposed rate increase is estimated to add about $10 a month to most residential customers’ bills. We think this is exorbitant,” Potosek wrote.

Fixed charges are a rate plan where consumers pay a constant rate on their electric bill regardless of how much electricity they use. Although these rates are fixed, Potosek said that this disproportionately affects users who consistently use less power and electricity, which tend to be small businesses and the elderly population. Metzger also mentioned in her comments to the Public Service Commission that an increase in these utility fixed charges reduces the incentives for residents to invest in alternative and greener energy sources such as solar panels.

Ultimately, there appears to be consensus and unity among local politicians regarding NYSEG, its operations and its rate increases. Sullivan County especially appears to be taking the brunt of the power outages across the area, and this, along with the rate increases, is affecting daily life for some local residents. 

Further reading

www.bit.ly/nysegsullivan

www.bit.ly/fixedchargesfacts

www.bit.ly/metzgernyseg 

www.bit.ly/metzgernyseg2

www.bit.ly/metzgernyseg3

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