|
Today, Congressman Brian Higgins (NY-27) sent a letter asking the New York State Public Service Commission (PSC) to reject the proposal by New York State Electric and Gas (NYSEG) to increase rates for electricity and gas delivery by 18.6% and 17.4% respectively.
"The audacity of NYSEG to hike rates to struggling consumers while their average energy transmission costs last year decreased is offensive and egregious,” said Congressman Higgins. “The increase is even more incredible when you consider the significant new resources made available to utilities this year through the Recovery Act.”
In his letter, Congressman Higgins identifies declining average energy transmisson cost numbers for utilities over the last year as cited by the Bureau of Labor Statistics in the “Producer Price Index for Electric Bulk Power Transmission and Control” and “Producer Price Index for Natural Gas Distribution.”
“This is an unfair and baseless increase and we are prepared to stand up with local utility consumers and fight it,” Higgins added.
Below is a copy of Congressman Higgins’ letter:
September 19, 2009
Hon. Garry A. Brown
Chairman
New York State Public Service Commission
Empire State Plaza
Agency Building 3
Albany, NY 12223-13058
Via fax: 518-486-6081
Re: NYSEG’s proposed increase in electric and natural gas transmission rates
Dear Chairman Brown:
I read with great interest the Buffalo News’ report that New York State Electric and Gas (NYSEG) has requested permission from the Public Service Commission (PSC) for a 18.6% increase in the rate it can charge for the delivery of electricity and a 17.4% increase in the rate it can charge for delivery of natural gas.
I write today to adamantly protest these proposed increases on the grounds that federal government data shows that costs associated with natural gas and electrical transmission have actually fallen substantially over the past year, and on the grounds that the federal government is presently instituting a 20% subsidy program for upgrades to electric transmission facilities which will reduce costs for NYSEG and similarly situated utilities.
Proposed Electric Transmission Rate Hike Unjustified
The Bureau of Labor Statistics measures changes in the costs of doing business for various industries throughout the economy. The “Producer Price Index for Electric Bulk Power Transmission and Control” fell from 114.6 in July, 2008 to 112.5 in July, 2009. This means that the costs to utilities engaged in electrical distribution actually fell 1.8% over the past year. In the face of this deflation, the request for 18.6% increase in transmission charges for consumers is wholly unjustifiable.
Furthermore, the American Recovery and Reinvestment Act provided $4.5 billion for the Enhancement of Electricity Delivery and Energy Reliability. As part of this funding, it provided $3.375 billion for the Smart Grid Matching Grant Program which was authorized in the Energy Independence and Security Act of 2007. This program provides a 20% subsidy to utilities engaged in electrical transmission for costs associated with upgrading and improving the efficiency of their facilities. In an environment in which NYSEG and similarly situated entities are eligible for generous federal subsidies to reduce their costs, the proposed 18.6% transmission rate hike is not acceptable.
Proposed Natural Gas Transmission Rate Hike Unjustified
The proposed increase in transmission charges associated with natural gas is even more outrageous than the proposed increase in electric transmission charges, given that the deflation in the costs associated with natural gas transmission is so much more pronounced. In July, 2008, the “Producer Price Index for Natural Gas Distribution” stood at 167.5. By July, 2009 it had fallen to 115.3. That constitutes 31.2% in deflation. In this sharply deflationary context, NYSEG’s request for a 17.4% is wholly unjustifiable.
Thank you very much for your consideration. Again, based on federal government data showing deflation in the costs associated with electric and natural gas transmission and distribution, and given the new federal subsidies for this industry, I ask that you deny NYSEG’s request for transmission rate hikes.
Sincerely,
Brian Higgins
Member of Congress
|
|
