SUNY New Paltz President Donald Christian announced on May 21, 2014, that he had accepted a compensated position on the board of directors of Central Hudson Gas & Electric Corporation sparking criticism from some campus and community members as being a conflict of interest.
Central Hudson is a privately-owned energy utility company that maintains and operates electric and natural gas infrastructure within a defined geographic service area. The infrastructure includes electric poles and lines, electric substations, underground natural gas lines, natural gas regulator stations, electric and natural gas transmission lines and metering equipment. Central Hudson’s service area covers 2,600 square miles and includes portions of Albany, Dutchess, Greene, Putnam, Orange, Sullivan and Ulster counties, according to their website. Central Hudson is the sole energy provider of SUNY New Paltz.
The allegations against Christian claimed that his serving on the board of a privately held, for-profit utility, one fiscally associated with the college, directly conflicted with his position as the president of a public institution committed to reducing energy consumption.
In an email dated May 20 to Christian from the New York State Joint Commission on Public Ethics – obtained under the Freedom of Information Act by a New Paltz faculty member in mid-August – Christian’s request for approval to serve as a Central Hudson director was granted by the state provided that “in your role as President of SUNY New Paltz you recuse yourself from participating in or discussing any matters involving or specifically affecting Central Hudson and in your role as a Director of Central Hudson, you recuse yourself from participating in or discussing any matters involving or specifically affecting SUNY New Paltz.”
Critics of the appointment said that while Christian was obligated in his position as SUNY New Paltz president to remove himself from matters involving Central Hudson, should the college’s energy use increase and thus increase the cost of the utility bill, Christian would benefit monetarily as a board member of Central Hudson.
In a letter to New Paltz faculty dated Aug. 21 responding to media attention of the claims brought against him, Christian outlined several points proving the board appointment did not constitute a conflict of interest violation in his position as college president.
Christian said that as per his contract as a SUNY college president, he is permitted to serve on “up to two corporate boards of directors for compensation with appropriate approvals by [SUNY] Chancellor Nancy Zimpher and relevant state agencies, currently the Joint Commission on Public Ethics,” both approvals of which were met prior to the May 21 public announcement of the appointment.
“In the weeks after those announcements, I heard only praise and positive comments from the campus and broader community,” Christian said in the letter. “If a major employee group or media outlet had concerns about this appointment, those concerns were not raised directly and openly with me at the time.”
Addressing the claim that increased energy usage by the college would in turn profit Central Hudson, Christian said Central Hudson provides infrastructure for energy delivery and their revenue does not depend on the amount of energy customers’ consume since the same infrastructure must be in place “irrespective of the amount of energy it delivers.”
According to Central Hudson spokesperson John Maserjian, following deregulation of the utility industry in New York in 2000, Central Hudson was required to divest its energy generation facilities. As the source of energy supply, generator facilities would financially benefit from increased energy usage.
“Central Hudson now purchases energy from the wholesale energy market on behalf of its customers, which is sold at the same price it was purchased for. There is no mark-up on energy supply,” Maserjian said.
Energy Management Coordinator at SUNY New Paltz Brian Pine said the campus’ utility bill is mainly divided into three major charges, of which only a fixed rate energy delivery fee returns to Central Hudson as profit. The other fees include a commodities charge – the price determined by energy generator plants based upon the amount of energy delivered – and a demand charge – a penalty charge instituted when the college exceeds the determined need of its energy consumption, used to recover costs of increased energy distribution.
Christian did not disclose how much he would be compensated for the board appointment, but said he would establish a scholarship endowment, the minimum of which requires a $40,000 commitment, through the SUNY New Paltz Foundation out of “gratitude for this and other opportunities I have been provided as president.”