Officials urge PSC to suspend Central Hudson rate hikes, speed up billing investigation

Elected officials in the Hudson Valley are urging the state Public Service Commission to prevent Central Hudson from hiking customers' costs while the company is investigated for its billing practices.

Ulster County Executive Pat Ryan, state Sen. Michelle Hinchey and Assemblyman Kevin Cahill sent a letter Tuesday to the PSC, which they called on to take further action against Central Hudson after more issues were raised by customers recently.

Those officials said a public hearing on May 3 "raised new concerns including the company's inability to return funds in a timely fashion, the assessment of returned check fees when accounts are credited...and the recategorization of residential households as commercial customers."

The trio encouraged the PSC to pursue several measures, including expedite its investigation and publish its findings by Oct. 1, before the heating season begins; appoint an independent monitor to oversee Central Hudson's daily operations while the investigation is ongoing; suspend the company's planned rate increase in June, as well as restrict any rate increases until the investigation is closed; and penalize the company and order it to compensate customers.

The PSC said in March that it was investigating problems with Central Hudson's upgrade to a new billing system, as well as reviewing the company's response to a Feb. 4 storm that knocked out power to more than 67,000 customers, some for days. The PSC also directed an independent consulting company to conduct an audit of Central Hudson's management and operations.

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On Wednesday the PSC said that "while a date has not been set when the investigations will be completed, the department is conducting the investigation with all due and deliberate speed and the requests put forth will be reviewed and considered."

"Given the seriousness of the utility billing problems at Central Hudson, the department is conducting separate investigations — including a deep-dive, third-party management audit — to determine what went wrong and how should it be fixed," the PSC said. "Ensuring that customer bills are sent out timely and accurately is the singular responsibility of the utility, and the department will hold Central Hudson accountable for any billing errors while ensuring customers are held harmless."

Large electricity and natural gas utilities must be audited at least once every five years, according to state law, and the PSC said this is one of those regularly scheduled audits.

On Wednesday Central Hudson said it "takes seriously its responsibility in serving our customers. The vast majority of Central Hudson customers have received accurate bills since the new system was implemented last September, and billing for more complicated energy services, including Community Solar and third-party suppliers, is also now up to date.

"Central Hudson has not suspended utility services nor imposed late fees since March 2020. We continue to offer no-cost payment plans and minimum deferred payment agreements to help our customers manage their accounts."

Central Hudson serves about 309,000 electricity customers and 84,000 natural gas customers in eight counties in the Hudson Valley, including Dutchess, Orange, Putnam, Sullivan and Ulster.

The company is slated to raise delivery costs on July 1 as part of a three-year rate plan that runs through June 2024. The average customer will see a delivery increase of 1.3% for electric and 1.6% for gas, Central Hudson said.

Supply prices are subject to the market, according to the company, which said recent months have been volatile and it expects energy prices to stay high throughout the summer.

"Electric and natural gas commodity prices have increased substantially as compared to last year throughout the country and in the rest of the world," Central Hudson said Wednesday. "These prices are determined by the energy markets and are not marked up by Central Hudson. We also employ hedging measures to help stabilize natural gas and electric supply costs against fluctuating market prices for customers to who receive energy supply through Central Hudson. These practices have saved our customers millions of dollars since the start of the year.

"We are also working with financially distressed families by connecting them with resources to reduce or eliminate their account balances due to the COVID-19 pandemic. So far, nearly $15 million in funding has been received or committed through these sources to reduce or eliminate utility arrears for more than 16,000 families served by Central Hudson."

Central Hudson previously said it was looking forward to cooperating with the PSC and the independent auditor. Joseph Jenkins, a company spokesperson, said in March that Central Hudson stands by its response to the Feb. 4 storm, "especially in Ulster County," which was hit particularly hard.

"We put together the largest response in our history, and 97% of our customers (who lost power) had their power restored in four days," Jenkins said.

Matt Spillane covers breaking news throughout the Hudson Valley. Click here for his latest stories. Follow him on Twitter @MattSpillane. Check out our latest subscription offers here.