Con Ed is feeling the heat.
Last week, blackouts swept through all five boroughs, each one leaving thousands of New Yorkers without power. Though merely the latest in a string of recent high-profile failures — including the arc flash in Astoria that turned the night sky bright blue and last July’s asbestos-spewing gas pipe explosion in the Flatiron District — the blackouts are prompting many residents and officials to pay closer attention to Con Ed’s practices.
The scrutiny could not come at a worse time for the company, which is currently negotiating a rate increase that would fetch it $695 million more in revenue. Like all privately-owned utility companies, Con Ed relies on public indifference to get its plans approved. These plans include pumping over $200 million more into fossil fuel infrastructure, such as expanding a fracked gas plant in Astoria, Queens. Con Ed is also asking to raise our monthly fixed charges (the fee you pay no matter how much electricity you use) in order to maintain a $1.8 million strike-busting fund, in case its workers object to the company’s dangerous and exploitative labor practices.
If we want an energy system that works for all New Yorkers, we need to take our power back from the investors.
There are many in New York that would object to Con Ed’s requests, and many have, including AARP, whose elderly members will be disproportionately affected by the rate hike. But Con Ed’s plans, despite technically being public record, are buried behind layers of bureaucratic obstruction and have been translated by the company’s lawyers into unfeeling technocratic jargon. With the public in the dark, Con Ed is confident that its plans will go unnoticed and unprotested.
The agency overseeing the rate case, the Public Service Commission (PSC), seems content with this arrangement. The PSC first ignored, then rejected, advocates’ request to locate public hearings in accessible, convenient locations and made it impossible for the public’s concerns to be considered during the evidentiary process, the portion of the rate case that most directly influences the outcome.
Recognizing that it was time to take matters into our own hands, the NYC Democratic Socialists of America and Councilmember Costa Constantinides, whose Astoria district houses numerous natural gas plants, are jointly hosting an alternative public hearing this Monday, July 22nd. All statements delivered at the event will be submitted as official public comments to the Con Ed rate case. This event is one important step toward meaningful public involvement, and presents an opportunity for New York City residents to pull back the curtain of utility governance in this city.
Our public institutions have largely abandoned their responsibility to advance the public welfare. We need more of our elected officials to stand up to Con Ed’s rate hike, as New York City Public Advocate Jumaane Williams did Friday. Governor Cuomo, Mayor de Blasio and Speaker Johnson should publicly oppose the rate hike and send the message that the public has allies who will fight on our behalf.
However, it’s important to recognize that there are deeper, more structural issues ensuring that the public interest remains a mere afterthought in the city’s energy politics.
As a private company, Con Ed is dependent on investors who are as flighty as they are wealthy, and pleasing them is the central concern of its business model. Rather than prioritize the public interest, Con Ed must guarantee its investors a consistent stream of profit to keep them from pulling out.
This desire for increased investor returns was identified by Con Ed’s own PSC testimony as “the primary factor” motivating their request for $231 million more from the public. Instead of our dollars going directly into grid and infrastructure improvements, Con Ed funnels our payments into the wallets of its investors, who in 2018 took home over $800 million in dividends.
This investor-owned model has far-reaching consequences for our access to safe, affordable energy. For example, Con Ed could invest in repairing its aging gas, electricity and steam infrastructure to protect the public from a catastrophic explosion or blackout. However, much of this infrastructure is below busy city streets and would be complicated to repair, so Con Ed opts instead to pump money into new fossil fuel infrastructure, from which it can claim significant profits with much less hassle. Similarly, rather than incentivize energy efficiency and support renewable energy sources, Con Ed’s investors view these as threats to their line and either slow-walk important changes or fight them directly.
There is a fundamental mismatch between what’s good for the public and what’s good for the investors who direct our utility system. The Public Service Commission’s resolute rejection of public input has certainly enabled Con Ed’s profit extraction. However, even the most democratically-minded government regulator could not force investors’ interests to align with the public interest. As long as utilities are loyal to private investors and not to the public, issues of public safety, ecological sustainability and economic fairness will take a back seat to short-term profit and corporate greed. If we want an energy system that works for all New Yorkers, we need to take our power back from the investors. We need a democratically-controlled, decentralized and decarbonized utility system. We need public power.