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Con Ed Is Seeking Double-digit Rate Hikes; Astoria Residents Respond

Issue 276

Astoria residents demand rollback of Con Ed’s new round of proposed rate hikes at a "People's Hearing."

Jenna Gaudino Dec 18, 2022

Con Edison, the privately owned, publicly-regulated monopoly that provides electricity to New York City and Westchester County, is seeking permission to raise its rates by 11.2% for electricity and 18.2% for gas. If the increases are approved by the New York State Public Service Commission (PSC), the average residential customer’s electric bill would go up by about $21 per month, and their gas bill by $38, beginning in 2023. 

The proposed increases would affect Con Ed’s approximately 3.3 million electricity customers and 1.1 million gas customers. The PSC grants ­increases after a period of public comment. It held three online public hearings in March, and has received more than 4,500 written comments. 

The PSC and Gov. Kathy Hochul did not respond to a letter requesting another public hearing, sent in September by Assemblymember Zohran Mamdani (D-Queens), state Sen. Michael Gianaris (D-Queens) and more than a dozen other state ­legislators. The legislators assert that most New Yorkers don’t know about the potential rate hikes or how they’re determined.

Spurred by the lack of communication, Mamdani,  with the assistence of Gianaris and others, hosted a “People’s Hearing” on the evening of Nov. 21, in Astoria, Queens. The hearing gave consumers the opportunity to express their hardships and frustrations, which were recorded and submitted as official public statements to the PSC and the governor.

“What we are fighting for, through legislation, through organizing, is a different way of distributing energy.”

“How dare Con Edison tell us that they will not talk to us about the rate increase of 10%!” Roseann McSorley, owner of the Katch Astoria gastropub, said at the hearing. “Who the hell do they think they are to hand us a bill for 10% more? This community has lost a third of our small businesses during COVID! A third! We’re all families trying to support our community. They come to our restaurants, our salons, our liquor stores. They enjoy the benefits of living in an Astoria that will not exist anymore. We cannot pay a 10% increase! We cannot!”

Con Ed argues that the increases are mostly due to increases in the market cost of fuel. “The supply cost has shot way up. It has to do with demand. It has to do with the supply,” Jamie McShane, the company’s director of media relations, said in a September press release. He said the war in Ukraine is pushing up oil prices as well, and “we buy it at the wholesale market, and we basically charge customers what we pay for it without a profit.”

The company also says that it will have to pay $2.5 billion in property taxes in 2023, and about $180 million of the increase in electric costs and $75 million of the increase for gas would go to cover that. 

The rate increases will land on New Yorkers who are already having trouble paying their gas and electric bills. According to an analysis of data from January 2022 by The City, more than 400,000 residential Con Ed customers were 60 or more days behind on bill payments. 

“I was getting off the bus and I saw this lady, this elderly woman, and she had two bags with her and she was struggling with them,” said Eric Thor, an Astoria resident, at the People’s Hearing. “I lifted up the bags and they were really, really, heavy.  It was all potatoes in there. So I walked with her to her apartment and I said, ‘Why didn’t you go to the grocery store that’s one block away?’ And she said, ‘The potatoes there are too expensive.’ So a 60 dollar raise would be debilitating.”

Sen. Gianaris argues that Con Ed could afford to lower rates even with the recent increases in the cost of fuel. It faces little competition, given its monopoly, and has $14 billion in annual revenues. 

Assemblymember Zohran Mamdani took the lead in organizing the Nov. 21 “People’s Hearing.”

“We may defeat one rate hike, but then another will come in three years,” Assemblymember Mamdani said. “So what we are fighting for, through legislation, through organizing, is a different way of distributing energy. … That is something called public power. Con Ed is a private company and a private company will always want more profit. It’s our job, as the public, to ask, ‘Is this the only way we can do this?’ And we know that it’s not.” 

The New York Power Authority (NYPA), run by the state, is one possible alternative. It currently finances construction of power projects through bond sales to private investors and repays bondholders with proceeds from their operations, without using any tax revenue or state debt. The power from those projects is delivered through a grid that Con Ed operates, however. 

Public power could also help the state convert its energy system to renewable sources. More than 70% of the electricity NYPA produces is from ­hydropower. 

The Build Public Renewables Act, introduced in the Legislature in 2021, would allow NYPA to build renewable energy projects itself and sell electricity directly to consumers. It would also require the NYPA to provide only renewable energy by 2030 and make it the sole power provider for state-owned and municipal properties by 2035. 

The Senate passed it by a 38-25 vote last June, but it did not receive a committee hearing in the Assembly.

Con Ed boasts it has reduced carbon emissions from its facilities and operations by more than half since 2005, and pledges it will reach zero emissions by 2040. 

However, the utility company does not actually own many of the plants that provide its electricity. State regulations in the late 1990s required the company to divest from its power plants in the city, such as the 2,480-megawatt Ravenswood complex in Queens that provides about one-fifth of the city’s electricity, mostly from burning natural gas.

The Ravenswood plants current owner is committed to making the transition to clean energy, its CEO told the Queens Post in February, but “it will take a lot of work over a number of years.”

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