Since the start of 2018, dozens of New Paltz residents were shocked by a string of unexplained and substantial increases in their electric bills.
Some Central Hudson (CH) utility customers’ bills doubled, while other bills jumped five times or more, with no alleged increase in electricity usage within the time frame. The bills occurred during the months where actual meter readings were taken, leaving many customers frustrated and confused. While market prices can justify a portion of the bill spikes, some increases seem to exceed the realm of normalcy.
CH bills are divided into two portions: delivery and supply. Bills are estimated, based on historical use of the house on a bi-monthly basis. While delivery rates are fixed and regulated by the New York State Public Service Commission (PSC), the supply charges vary on a monthly basis, and are adjusted daily, according to the market price.
New Paltz resident Naomi Allen received a $920 electric bill in March. The charge was 10 times higher than any previous bill since buying the home in 2014. After claiming she had not used additional electricity that month, CH sent a worker to inspect her meter and other appliances to seek the source of her problem: no malfunctions were discovered.
“They said they wouldn’t replace our meter because it was essentially admitting that something was wrong,” Allen said. “They refused to give us any documentation because they said it was all recorded on the phone, but I had no access to it. It makes me feel vulnerable.”
Allen filed a complaint with the PSC after CH insisted that she pay the bill. Despite the ongoing investigation, CH then sent a final termination notice to the home for May 1.
Short term residents were affected by the boosted bills as well. When Devon DeGroat and his roommates began renting their apartment in January they were billed $937, followed by a $1,268 bill for March. DeGroat attempted to contact CH multiple times, only to wait on hold for two to three hours at a time with no response.
“I’m a college student and I don’t have the money to pay bills like that,” DeGroat said. “It’s very upsetting and enraging. They monopolize the electricity market, so they only care about the money. You either pay or they shut the power off.”
While the bulk of bills came out of the residential sector of CH’s service, local commercial consumers felt the repercussions as well. Sunny Patel, owner of the Rodeway Inn & Suites in New Paltz, received a $13,053 bill in January, followed by a $7,963 bill the next month.
“They said they would check the meter, but they didn’t notify me when it would happen,” Patel said. “How can I be sure they checked it when I have no proof?”
In the three years he has owned the inn, Patel has never received an electric bill higher than $2,100. He only heats certain rooms and is careful not to heat those that are vacant.
He blames a portion of the costs on Atlantic Energy, an alternative energy supplier, who he claims forged his signature and made them his energy supplier. Allegedly, the signature on his license does not match the one on the transfer form. CH tacks on additional charges for customers who outsource their supplier.
“The price hikes are not a phenomenon that only affected the Hudson Valley region,” said CH spokesperson John Maserjian. “When demand for energy is high, the market price for electricity rises substantially.”
According to CH, customers can expect an increase in the electric bills during periods of cold weather. In January, temperatures were 50 percent colder than average, according to a letter to CenHud customers. During the week of peak use, natural gas prices shot up to 60 times higher at certain points. As a result, CH’s rates for January and February were slightly higher than years prior.
The U.S. Energy Information Administration cites numerous factors that contribute to the wholesale electricity market, which affects retail prices.
In January, New York utilities struggled to acquire the fuel needed to supply the high electricity demands
Approximately 359 billion cubic feet of natural gas was withdrawn between Dec. 30 and Jan. 5, more than double the five year average withdrawn that same week. This increased consumption drove up rates, which elevated the cost of production and supply of electricity from power plants who rely on the gas.
Average bills also tend to increase when the total revenue of a utility increases. From 2017 to 2018, CH’s residential sector experienced roughly $4,000 more in revenue and 24,000 additional sales in January. In February their revenue increased by about $2,000 and by 12,000 sales.
Commercial revenue approximately increased by $4,000 and 4,000 sales in January, with an added $2,000 in revenue and 12,000 more sales in February. Although a customer may personally not use more electricity, the overall use of their region may affect their supply rates.
The delivery portion of the bill is then influenced by a customer’s usage. Customers pay a basic service charge, to be connected to the grid, and a variable charge based on their usage. With increased usage, customers are charged more for delivery, which drives up the overall bill.
“As long as the weather remains milder and energy demands lower, we can expect that supply costs will remain in the normal range,” Maserjian said. “In reviewing recent billing for our customers, we did not see any evidence of widespread problems or unusual usage, except for the coldest days this winter. Individual customers who receive bills that seem inconsistent with past bills or weather conditions should call us.”
However, Allen’s PSC investigation revealed that her home’s meter was faulty and caused the reported increase of usage. She was given a corrected bill which came out to $150.
“Central Hudson discouraged me from filing a complaint with the PSC,” Allen said. “The most disturbing thing is that most people don’t have the resources to fight back.”
Utilities are required to randomly select two to three percent of their meters for inspection each year. Customers are supposed to be notified when their meters will be inspected and replaced. Maserjian explained that old analog meters have not been in production for 10 years, and are steadily phasing out.
“Many of the analog meters are old and the entire industry is moving towards electric meters,” Maserjian said. “Faulty meters are a rarity, but it can happen just like with any piece of equipment.”
Customers who are concerned with their meters or other billing issues should report their findings with the PSC and CH. Numerous payment options are also available to alleviate the burden of high electric bills for CH customers.
New York State Assemblyman Kevin Cahill is a SUNY New Paltz alumni and longtime proponent for fair utility billing. He addressed the concerns of customers who feel they have been wronged.
“Customers deserve transparency in this process and should report any unusual spikes to the company” Cahill said. “Hudson Valley residents and businesses are already stretched thin when it comes to paying their gas and electric bills so it’s important that individuals remain vigilant in monitoring usage and contesting unfair charges.”