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Power players slam Con Ed bid for rate hikes

Experts testify utility giant needs to fix short-circuits in its operations, from stormproofing to staffing

For the first time in three years, Consolidated Edison is asking the state Public Service Commission for permission to charge its 4.4 million customers in New York City and Westchester County higher electrical and gas rates.

The utility giant wants to use the additional $400 million to help stormproof its system, through actions such as moving overhead power lines underground and constructing flood barriers around facilities, like the East River power plant that was inundated with floodwater during superstorm Sandy, blacking out much of Manhattan.

Critical power transmission facilities lie in flood zones — and Con Ed and the city disagree about what areas are at risk. Map from Consolidated Edison.

Critical power transmission facilities lie in flood zones — and Con Ed and the city disagree about what areas are at risk. Map from Consolidated Edison; click on image for larger view.

Con Ed estimates that the average New York City household would see about a $3 increase in its monthly electric bill, from $81.64 to $84.55. A typical gas-heating bill would rise from $187.68 to $190.35. If approved, the new rates would go into effect in January.

The Commission can decide to grant Con Ed’s request, approve a lower increase or allow no increase at all.

As part of a nearly year-long review, the Public Service Commission is asking New Yorkers what they think of Con Ed’s bid for a rate hike. It has already collected testimony from experts and interested parties, many of whom raised strong objections to the utility’s gameplan. Here are some highlights.

 

1. Con Ed isn’t staffed to ensure that its electrical system is running safely

A cable splicer and a consultant shared the discouraging view of Local 1-2 of the Utility Workers Union of America, which represents about 8,000 Con Ed employees: “Staffing cuts over the past few years, and some that have occurred since the arrival of Super Storm Sandy, have compromised Con Edison’s ability to ensure safe and reliable service to customers.” The company has cut its full-time workforce nearly 17 percent, relying on contractors — or, in the case of an emergency like Sandy, workers sent in from other areas — without extensive training or knowledge of the city’s unique electrical system when the workload gets heavy, according to the testimony.

The union says, the company has adopted a “‘run it until it breaks’ mentality, in which ongoing maintenance has been replaced by emergency repairs conducted only when equipment fails.” It now takes the company four to six weeks to replace temporary fixes in the system with permanent repairs — something it used to do within three to five days, according to the testimony. At the time that Sandy hit, the union says, the company’s electric distribution system was already in a weakened state, partly because its workers were still trying to catch up on maintenance work that wasn’t done at all during the month last summer when the company locked out its union employees in the middle of a labor dispute.

The union outlined many of these same concerns in a report published a few months after the storm. It told the Public Service Commission that if Con Edison does get a rate increase, it needs to be on the condition that funds go to hiring more (unionized) staff members.

Said utility spokesperson Bob McGee in an emailed statement: “Con Edison continually maintains its system to provide the highest levels of safety and reliability and optimizes the use of employees and contractors in order to provide service to customers in the most cost-effective manner.” 

 

2. Con Ed hasn’t done enough with millions it has collected to increase energy efficiency

Con Edison has continued to fall behind on energy reduction targets set by the Public Service Commission, which are funded by special fees customers pay on their bills (look for the line that says “Systems Benefit Charge/Renewable Portfolio Standard”). While Con Ed isn’t alone in its struggle, other utility companies have managed to get close to meeting their targets. Con Ed has only reached 65 percent of its goal, according to testimony from Jackson Morris, director of strategic engagement for the Pace Energy and Climate Center.

“Con Edison has been lagging in its implementation of energy efficiency measures, failing to realize ratepayer savings comparable to those other utilities have captured,” Morris said in his testimony.

McGee acknowledges the utility company has lagged on energy efficiency. “While customer participation has been affected by the slow economy and also by the significant impact of Superstorm Sandy, which diverted both company and customer resources, we are getting back on pace for the annual goal and are working hard to make up ground,” he said. “Con Edison also is continuing to explore innovative marketing strategies, new technologies, and program enhancements to facilitate customer engagement.”

 

3. Con Ed gets in the way of NYC greenhouse gas reduction

One of the most ambitious parts of the Bloomberg administration’s agenda to reduce New York City’s carbon footprint is Greener, Greater Buildings, which requires owners of big buildings to measure their energy use every year — a step toward making changes to reduce their greenhouse gas emissions.

As an energy company, Con Edison plays a critical role: it collects the data that building owners need in order to comply with the law. But that data can be hard to come by, and to use, for anyone outside the utility.

According to testimony from New York Energy Consumers Council, a group representing large property holders, “three years of experience has uncovered serious deficiencies that warrant change in Con Edison’s processes.”

Customers can’t begin requesting the data they need — let alone actually receive it — until mid-February, giving consultants and property owners little time to go through the information and submit it to the city by its May 1 deadline, the consumers’ group testified. Con Ed also uses a different system for tracking customer addresses than the city does, making matching accounts to addresses confounding.

“It’s been relatively cumbersome,” said Michele Soderstrom, an energy engineer for the consulting firm Bright Power. The majority of property owners use consultants like Soderstrom in order to comply with the city’s laws.

Industry experts recommend that Con Edison invest in making access easier — ideally by allowing customers to directly upload their energy use data into the city’s Greener, Greater system. Such an automated process already exists for water usage data coming from the New York City Department of Environmental Protection.

Responds Con Ed’s Bob McGee: “The company automated much of the aggregated reporting process this year, with a few early technical difficulties resolved, and all consultants and property owners receiving their data prior to the city’s deadline.  Each year Con Edison works to streamline and improve the process of requesting and delivering aggregated consumption data.”

 

4. Con Ed’s proposed fixes for future storms are inadequate

The Mayor’s Office of Long-Term Planning and Sustainability — which oversees New York City’s efforts to prepare for the effects of climate change — noted that Con Edison is using decades-old data in planning for its $1 billion effort to prepare for the next storm. FEMA is set to release new flood maps this month. The new 100-year floodplain is 48 percent larger than it was before, according to the testimony, with large expansions in Brooklyn and Queens.

That leaves vital power facilities exposed to future storms. Even when informed by the city that the electric substation carrying the heaviest load in the city is at “significant risk” of flooding, a city representative testified, “Con Edison has stated that it has no intent to strengthen that substation in the foreseeable future.”

As for the upgrades that Con Ed is asking customers to pay for: they do “not appear to be supported by any substantive analysis.”

Utility spokesperson Bob McGee responds: “Con Edison’s proposals are a significant step forward toward protecting critical equipment and customers from significant storms. Additionally, the company has already made a number of improvements in time for the 2013 hurricane season. At the same time, we must control costs for our customers.  With weather changing and violent storms becoming more frequent, we expect our storm-hardening program to evolve for years to come.”

 

5. People are still pretty mad about how things played out during Sandy

So far, the Public Service Commission has only received a handful of public comments related to the rate increase, but the ones that have come in illustrate a general frustration with how Con Ed has conducted itself — especially during and after superstorm Sandy. A sampling:

“Con Edison left me and other New Yorkers in the dark without consideration to be honest on why it took weeks and weeks to give us straight answers on when help will be available.”

“Following Sandy, we were inconvenienced by this utility for almost one week. During that time we did not have electricity nor were we able to contact the utility using the systems that they had put in place for communication of outages. Furthermore, the information that the utility did provide to us was inaccurate and misleading.”

“I have lost count of e-mails and phone calls addressing my fluctuating power problems on my block.”

“The heroes of the Sandy recovery are Con Ed workers, and their fellow utilities workers from other states. The victims of the storm are Con Ed consumers who suffered losses from power outages. The incompetents were the Con Ed administrators, executives who were called out by Governor Cuomo for their poor performance.”

In his testimony on behalf of the New York Energy Consumers Council, former executive director David Bomke agreed with some customers that they should not have to pay for storm-proofing efforts that have always been the company’s responsibility.

“Con Edison’s failure to prepare adequately for Hurricane Sandy cannot be used as a justification for significant and exorbitant rate increases,” he said.

Said McGee about the utility’s response during and following Sandy: “We had over a million customers who were without power after Sandy, five times more than what was caused by any other weather event in the company’s history, and we had utility workers come to aid of our 13,000 employees from all over the country and Canada to help us address this unprecedented disaster. We had all customers restored within two weeks, but unfortunately there were some customers who were unable to accept power from us.”