Verizon landline customers fund mobile and FiOS networks, consumer group claims


Verizon has wrongly overcharged its traditional phone customers and spent the cash building out its FiOS and mobile networks, a consumer group alleges.

The allegations — outlined in this New York Post story — might lead to lawsuits or other action against the company, says Bruce Kushnick, executive director of New Networks Institute.

Verizon denies Kushnick’s claims in no uncertain terms. “There is absolutely no factual basis for his allegations,” the company said in a statement to The Post.

2015-09 new-verizon-logoAnd New York regulators seem uninterested in probing Verizon’s fees, which are no bargain.  As The Post story notes, the only regulation of Verizon’s price is a $23 monthly charge for a basic level of service. People who buy the basic service actually pay around $30 after government taxes and fees are tacked on. Charges for things like long distance service, an optional plan by which Verizon maintains the wires inside your home, and add-ons like call waiting and voice mail jack up the price even further.

The state doesn’t regulate the prices of those extras. Kushnick and his group say that’s a big problem. You can read more about Kushnick and New Networks’ claims here.

Though New York shows little interest in regulating Verizon’s prices, it does care about the quality of landline service. The Public Service Commission voted March 17 to investigate whether the company does enough to keep up its copper-wire network.

2016-03-21 Verizon chart from PSC order

Source: NYS Department of Public Service

Fewer and fewer people rely on Verizon’s copper network, which dates to the late 1800s. But the abandonment trend is slowing. This chart shows what’s going on. The blue line’s gradual trend toward horizontal shows that fewer customers are giving up traditional phone service. This is happening despite the fact that Verizon’s copper-wire service is very expensive compared to what Time Warner, Cablevision and other TV/Internet companies charge for phone service. It’s also pricey compared to mobile service. People save money by giving up their Verizon land lines.

“(N)otwithstanding competition, millions of Verizon’s customers … may very well opt to rely on the copper network for critical voice services,” the Commission noted in an order March 21. Commission chair Audrey Zibelman said at the March 17 meeting that for years, state policymakers have assumed Verizon’s customers would choose cheaper phone options. State officials are puzzled by their loyalty to the company. “They’re not walking,” Zibelman said.

Customers are staying with Verizon despite evidence that the quality of its service is declining. At public hearings and other forums, Verizon customers have complained to the state that “service quality was poor and that they were often out-of-service for extended periods of time,” the March 21 order says. “They expressed dismay in [sic] Verizon’s response to their service quality concerns and cited many examples of repair times taking far longer than 24 hours.” The Commission sees an obligation to make sure Verizon’s remaining landline customers have decent service.

New York and other states have had little interest over the last decade or so in the price and quality of old-fashioned telephone service. The Ma Bell monopoly days have passed to history, and phone customers have plenty of choices. As rules and laws have evolved, the federal government has more responsibility for regulating Internet and wireless service.

Verizon has less interest in old-fashioned phones. It has told New York regulators that it’s not interested in expanding its FiOS network beyond areas it now serves. In other states, the company has sold its landline operations as it shifts focus to mobile service. Frontier Communications takes over Verizon’s landline and Internet business in Florida, Texas and California on April 1.

Now we’ll find out if a state investigation can make the company care more about what it sees as obsolete technology.


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New York ESCO crackdown challenged in court


Energy service companies — better known as ESCOs — are waging a court battle over their right to stay in business in New York.

A state Supreme Court judge in Albany on March 4 stayed a Public Service Commission order cracking down on the companies. That means ESCOs can continue to sell their products while their legal challenge is pending. The stay remains in effect at least until Albany Supreme Court Judge Kimberly O’Connor holds a hearing on the case, now set for April 14.

A decision by the commission February 20 said in sum that ESCOs not selling renewable or “green” energy plans must guarantee prices lower than the default plans offered by Con Edison and other utilities. That will effectively shut many New York ESCOs that promise residential customers a better deal on their electric and gas bills. Several studies have shown that despite the promises, ESCO customers pay more than those who stick with their utilities’ plans.

The Retail Energy Supply Association, an ESCO industry group, says the Public Service Commmission has “effectively eliminated the right of residential and small commercial customers in New York to choose among competitive energy offerings.” It called the stay issued by Albany Supreme Court Judge Kimberly O’Connor “great news for consumers as it protects their right to freely decide for themselves what energy products offer value.”

The Public Service Commission sees the stay as a temporary measure. “This preliminary ruling is merely procedural — it does not address the merits of the PSC’s order,” said commission spokesman James Denn.

In court papers, the ESCOs gripe the commission’s February 20 order took them by surprise. The commission’s decision came in a case set up last year as a review of “requirements that Energy Service Companies (ESCOs) must satisfy when providing electric or gas services in New York State.” Those words “did not put Petitioners [ESCOs] on notice of the requirements now being imposed,” their lawyers complain.

Maybe. But the commission’s action is no surprise to anyone who has followed the issue. It followed years of ESCO intransigence over the state’s efforts to make their pricing more transparent. It also comes amid a spike in consumer complaints against ESCOs. In January 2016, the state collected 592 consumer complaints about ESCOs, 29 percent more than the 459 complaints it collected in January 2015. The commission has also stepped up enforcement against some ESCOs’ shady business practices. Now a judge will decide if the state is right to crack down.


Posted in consumer advocacy, energy service companies, Public Service Commission | 1 Comment

Fed up state regulators end energy service companies’ ripoffs


Say goodbye to the energy service companies that promise a deal on your home’s Con Edison bill: New York regulators say they’re a ripoff, and will effectively shut them down.

It’s a big move by the state Public Service Commission. A commission order issued February 23 bars energy service companies from signing up new customers unless they guarantee their prices are equal to or lower than utilities’ full-service plans, or guarantee that 30 percent or more of their product comes from renewable sources like wind and solar.

The new rules mark the failure of the state’s two-decade old policy of offering consumers choice in their electric and gas bills. Having a choice of electricity or gas suppliers was supposed to save everyone money. Instead, study after study shows that energy service companies – ESCOs, for short – cost consumers big bucks.

ESCOs simply can’t compete with the default plans of Con Edison, National Grid and other utility companies. PSC Commissioner Greg Sayre explained why: “Both the ESCO and the utilities are buying the energy in the same wholesale market.” Con Ed resells the electricity or gas to its full-service customers without markup. But ESCOs have marketing costs and other overhead, Sayre noted. That’s why ESCOs almost always charge more.

Sayre said letting ESCOs continue to sell if they guarantee lower prices leaves an opening if some company really does have a better deal. “Maybe somebody has got a secret sauce,” he said. But he and other PSC commissioners expressed doubt the ESCO industry can promise lower prices.

“The market is simply not a competitive market,” said PSC chair Audrey Zibelman.

New York law requires the commission to assure consumers just and reasonable utility rates, Zibelman noted. “When people are paying two times, four times, as a much as eight times more than they would if they bought it from the retail utility, that’s not just and reasonable,” she said. “We can’t tolerate that kind of behavior.”

The commission’s move comes as New Yorkers have finally wised up to the ESCO ripoff. Electricity ESCOs lost 6.1 percent of their residential market share in Con Ed territory from May 2014 to May 2015, state data shows.

There’s ample evidence that ESCOs charge more. Federal data released last October shows that in 2014, electric customers who signed up with ESCOs paid 14.7 percent more for electricity than if they stayed with the plans offered by their local utilities. The higher prices have been an issue for years. A Public Utility Law Project study completed in 2012 as in the upstate Niagara Mohawk/National Grid territory found that on average, electric customers using ESCOs paid an extra $413 over a two-year period; gas customers paid an extra $235.

In a news release issued after the February 23 vote, the PSC cited several examples of ESCO ripoffs:

  • A New York City company charges more than triple Con Edison’s rate for electricity, and several companies charged more than double Con Ed’s rate for natural gas.
  • Four companies in the Hudson Valley charged more than double what Central Hudson charged for electricity. Another charged triple the utility rate for natural gas.
  • Several upstate ESCOs charged more than double National Grid’s electric rate. And in the Finger Lakes region, one company’s variable rate electricity plan charged eight times more than Rochester Gas & Electric’s prices.

Since ESCOs charge higher prices, it seems no surprise that they did not cooperate with a state effort to make their pricing more transparent. Unfortunately, that effort was a flop.

A bit more from the state’s news release:

[A state review] found several instances where companies were blatantly misrepresenting themselves, such as pretending to represent the local utility in order to trick customers into signing costly and harmful contracts. While these practices violate state rules, many consumers are simply unaware that they are or have been defrauded, and so are unable to protect themselves.

In December, Governor Cuomo announced that a separate investigation by the Commission’s Consumer Advocate resulted in 1,566 consumers receiving $950,700 in energy refunds from Ambit Energy, one of the largest ESCOs in the State. Customer complaints related to issues like predatory sales tactics and higher-than-expected prices have more than doubled since 2013 and today’s action is the latest effort to put an end to these dishonest business practices.


Furthermore, the review found several instances where companies were blatantly misrepresenting themselves, such as pretending to represent the local utility in order to trick customers into signing costly and harmful contracts. While these practices violate state rules, many consumers are simply unaware that they are or have been defrauded, and so are unable to protect themselves.

Want to read some harrowing tales about ESCO cheating and ripoffs? Check out this piece posted February 2 in the Village Voice. More than 5,000 people complained to the state about ESCO ripoffs last year, the commission says.

Of course, there’s fine print to the commission’s order. ESCOs have 60 days to show the state that their products are worthwhile, “such as aggregating customers or providing energy efficiency services.” If services like that will save people money, the commission says, it may let ESCOs sell them.

ESCOs may find some wiggle room in the state’s tax code. In some counties — not in New York City — ESCO customers get a break on sales taxes. Some ESCOs might leverage that break in a way that keeps them in business.

The state’s move has no effect on ESCO services provided to big energy users like factories and office buildings. ESCOs save money for big electricity and energy users. But those of us who struggle to pay our household Con Ed bill every month don’t have enough pull in the marketplace to get an energy deal any better than our neighbor’s.

Update: The Retail Energy Supply Association, an ESCO trade group, issued a news release February 23 denouncing the commission’s decision. The association says New York is “effectively eliminating retail choice for residential and small commercial customers.”

Posted in Deregulation, energy service companies, Public Service Commission | Leave a comment

National Grid wants 2017 gas price hike for NYC, LI customers


National Grid gas customers in New York City face big rate hikes in January 2017 under a plan the company submitted January 29 to the state Public Service Commission.

A typical National Grid gas heating customer in Brooklyn, Staten Island or Queens now pays about $99.85 per month. Under the proposed rate plan, that typical bill would rise 14 percent to $113.83 per month, the company says.

People who live in the Rockaways and on Long Island will see smaller percentage increases. But that’s no bonus – their bills are already higher. A typical Rockaways/Long Island heating bill is now about $111.67 per month. Under National Grid’s plan, they’d rise 12 percent, to about $125.06 per month.

National Grid gas pricesIf the state decides one-year increases of 14 percent or 12 percent are too harsh, National Grid has proposed phasing in the boost over several years.

National Grid says the price increase will let it “significantly accelerate” its pipe replacement program to 165 miles per year in its New York City and Long Island territories. “Many of those miles of natural gas pipe are now aging, and although they are still very reliably serving our customers they are in need of replacement and modernization,” said Ken Daly, National Grid’s president of New York operations.

National Grid says that adjusted for inflation, its charges for delivering gas to customers’ homes are lower than what it charged in 1996.

It also notes that its customers have gained by plunging natural gas prices, which are now at a 14-year low. Natural gas, oil and other energy prices are at historic lows. But even oil’s dramatic price drop since 2013 hasn’t matched natural gas prices. National Grid says that it beats oil’s price by 44 to 45 percent.

As with the Con Ed rate case also filed on January 29, it’ll take the state about 11 months to decide on National Grid’s price boost.

Posted in National Grid, natural gas, Public Service Commission | 1 Comment

Con Edison seeking big rate increases in 2017


Con Edison is looking for big rate increases from gas and electric customers starting in January 2017.

In a filing January 29 with the state Public Service Commission, Con Edison proposes raising New York City residential electric bills an average of 5.2 percent, and residential gas heating bills an average 7.7 percent. Both proposals are for one-year increases, though the company says it is open to making a longer term deal with the state.

Con Edison proposed electric ratesNew York City apartment dwellers who use 300 kilowatt hours of electricity per month – that’s pretty typical – would see their bills increase by $4.11 per month, to $82.63.

The proposed increase for Westchester County customers is a bit bigger. A typical Westchester residential customer uses 450 kilowatt hours of electricity per month. Their bills would rise $6.25 per month, to $115.89.

The gas picture is a bit more complicated, because people use gas in different ways. Typical Con Edison home heating customers would see their monthly bills rise by $10.99, to $153.30, an increase of 7.7 percent. Folks who only gas for cooking would see their bills rise by $3.75, to $29.75. That’s an increase of 14.4 percent.Con Edison proposed gas prices

It’s been a while since Con Edison has had rate increases. Its last electric hike was in April 2012, and its last gas hike was in October 2012.

If you follow the news, you know that energy prices are plunging – prices of oil and gas are at historic lows. US Energy Information Administration data shows that wholesale natural gas prices are about half what they were in early 2014. Con Edison resells natural gas to its heating and cooking customers – and natural gas is the main fuel used in New York’s electric power plants.

So why is Con Ed seeking such a big rate increase?

The answer is that Con Edison is looking for more money to pay for the wires and pipes that deliver gas and electricity to its customers.

While the overall electric price increase for a New York City residential customer is 5.2 percent, a look inside the number shows that the company’s delivery charge – what it gets for running wires to your home – will rise 8.4 percent.

It’s the same deal for gas. Inside the overall 7.7 percent rate hike for heating customers is an 11.5 percent boost in what Con Ed gets for delivering the gas to you. The 11.5 percent boost for cooking gas customers includes a 14.4 percent hike in delivery charges.

Con Edison says it will put the money from the rate hike toward safety improvements, storm hardening and better service.

The company wants to boost its program to replace gas mains. Right now, it replaces 65 miles of gas lines each year. It wants to boost the program to 100 miles per year, “reducing the time of total system replacement from over 30 years to 20 years,” according to a news release.

The condition of gas lines became an issue after a March 2014 gas explosion in East Harlem killed eight people and leveled two buildings. National Transportation Safety Board investigators blamed the blast on a combination of bad welding in Con Ed gas pipes and an unrepaired city sewer main leak that eroded the soil near the main.

On the electric side, Con Ed also wants to install smart meters that will alert the company to blackouts and better handle rooftop solar.

It takes the state about 11 months to handle a big rate case. Between now and next January, the Public Service Commission will hold hearings and ask questions of the company about its spending and its service.

Posted in Con Ed, electricity, natural gas, Public Service Commission | 1 Comment

Con Edison electric customers flee energy service companies


Con Edison electric customers are giving up on those folks who promise lower electricity bills.

Energy service companies — ESCOs — lost 6.1 percent of their residential customer accounts in Con Ed’s service area from May 2014 to May 2015, state data shows. The numbers are similar for other utilities in the state. ESCOs’ market share losses were especially steep in National Grid’s upstate territory, where they lost 9.8 percent of their customer accounts.

The decline in ESCOs’ customer rolls comes after several years of steady growth. The statewide data does not include tiny municipal utilities or the Long Island Power Authority.

Con Edison electric residential customers with ESCO serviceESCOs offer consumers a variety of price plans and gimmicks. Some will lock in your price, so you pay the same rate whether electricity prices go up or down. Others offer “green” power plans that promise your power comes from wind, solar and other renewable sources.

Behind ESCOs’ offers lies a sorry fact: They charge higher prices. Federal data for New York shows that in 2014, electric customers who signed up with ESCOs paid 14.7 percent more for electricity than if they stayed with the plans offered by their local utilities. The government data is not broken down by individual utility company.

ESCOs have pushed back against a Public Service Commission effort to clarify their pricing. Is that because they know they charge more?

Here’s something ESCO salespeople won’t tell you: Consumers who stick with utilities’ default plans buy electricity without any markup. Unlike ESCOs, Con Ed seeks no profit reselling the power it buys from generating plants. What Con Ed pays is what you pay. To profit, ESCOs must charge you more than what they pay generating companies.

ESCOs gripe that they can’t compete with the pricing power of Con Ed, National Grid and other big utilities. They complain that utilities have an unfair advantage — they can spread price blips over several months. ESCOs allege that happened in the bitter cold winter of 2014, when surging natural gas prices pushed New York electricity prices to record levels. Utilities’ customers paid the higher charges over several months, ESCOs say. But ESCOs say that under some of their pricing plans, they had to recover the money from their customers right away.

ESCOs opened for business in New York after the state deregulated its power markets in the mid-1990s. They’ve succeeded in helping lower commercial and industrial power prices. But federal data studied by AARP shows ESCOs have failed residential consumers for at least the last eight years.

AARP notes the average residential electric price of 22.28 cents per kilowatt hour for New York ESCO customers was 51% higher than the 14.72 cent average in the 20 states with ESCOs. AARP wants a thorough Public Service Commission probe of ESCO pricing.

Update, December 29: Ambit, a Texas-based ESCO, refunded nearly $1 million in overcharges to 1,500 New York customers, reports today. Here’s an earlier story on the topic.

Posted in AARP, Deregulation, energy service companies, Public Service Commission | 1 Comment

Superheroes power up Con Edison gas safety campaign


Pow! Zap! Well — Zap! probably isn’t a good idea, since a Zap! could mean a spark, and we’re talking about natural gas safety here.

DC Comics’ Justice League characters star in a new Con Edison gas safety campaign unveiled this week at New York’s Comic Con.

The app, “Gassed,” tells an elaborate story about a nerve gas that makes its victims scream in fear before it kills them. Someone is spreading vials of this gas through Gotham. Who? Why?

Suddenly, Cyborg gets a call. “It’s — Con Edison,” he tells Superman. He’s got a Con Ed field supervisor on the line. “We’ve tried to follow our protocol on this one, but it’s — strange,” the supervisor says. It turns out the nerve gas has the same rotten egg small added to natural gas.

2015-10-08 gassed imageThe odor leads Superman to discover the secret factory where the toxin is made. Thanks to Con Edison’s evacuation protocols, everyone in the neighborhood gets away safely.”If not for an average woman calling us because she thought she smelled something — well, who knows what might have happened?” says the Con Ed supervisor.

There’s a good Poison Ivy subplot too.

Con Edison needs to hear whenever someone smells natural gas. Last year’s natural gas explosion in East Harlem, which killed eight people, injured about 70, and leveled two buildings, might have been prevented if people who smelled gas in the area had called Con Ed or 911 sooner.

Con Ed’s superhero app is in line with a Public Service Commission order in April requiring utility companies to find better ways to advise people that they need to report natural gas odors. “Recent gas-related events, in which people reported smelling gas yet did not alert the utility, reinforce the need for more effective public awareness regarding natural gas safety, particularly with respect to the importance of reporting gas odors,” the commission said.

“We were looking for a new and engaging way to get our gas safety messaging out there,” Chris Gallo, a Con Edison customer outreach manager, said of the superhero app.

Here’s the link to “Gassed” on Con Ed’s website. It’s also available free in the Apple and Android app stores.

If you smell gas in Con Ed territory, call 1-800-752-6633. If you smell gas in National Grid territory, call 718-643-4050.

Posted in Con Ed, National Grid, natural gas, Public Service Commission | Leave a comment

Comfy summer for Con Edison electric customers


If you’ve been smart enough to steer clear of energy service companies, your Con Edison electricity bill has probably been pretty reasonable this summer.

Here are a couple of graphs that show what happened inside your Con Edison bill during the summers of 2014 and 2015.

2015-09-02 Con Ed NYC summer pricesThis graph represents the bills of typical New York City Con Edison electric customers — apartment dwellers who use about 300 kilowatt hours of electricity each month.

The blue part of the graph is the actual cost of the power you used. If you’re on Con Ed’s default plan, you pay what Con Ed pays generating companies for your electricity. The red part of the graph shows what Con Ed charges you to deliver electricity to your home — its wiring, transformers, light poles, and other equipment.

2015-09-02 Con Ed Westchester summer pricesThis graph shows the same thing for typical Westchester County Con Edison electric customers — homeowners who use 450 kilowatt hours of electricity per month.

The data for both these graphs comes from Con Edison.

Several factors lie behind the nearly unchanged rates this summer.

One is that the state Public Service Commission has frozen Con Edison’s transmission and delivery rates through the end of 2016. Con Ed last got a transmission and delivery rate increase in April 2012. That means by the end of 2016, the company’s rates will have been in place for nearly five years. The only change to what you pay for transmission and delivery has come from state fiddling with utility tax rates. This fiddling has saved you pennies. A typical New York City customer saved 26 cents per month over a year ago; typical Westchester customers saved 62 cents.

2015-08-31 summer Con Ed supply ratesA second factor is that the price of electricity itself has declined over the last few years. This graph shows the typical per- kilowatt hour rates Con Ed charged a typical customer over the last few summers. The prices are generally down because Con Ed has been able to buy power cheaply from generating companies in New York and elsewhere in the region. Generating companies are charging less because of the declining price of natural gas, the fuel most commonly used to make electricity in New York.

Another factor is simply the weather. It’s been warm this summer, but we haven’t had any big-deal heat waves or other kinds of weather events that drive up electricity prices. “We see it as a fairly typical NYC summer, with temperatures a few degrees above normal,” said a Con Ed spokesman.

Hotter weather increases everyone’s use of air conditioning, which pulls a lot of power from the grid. Generating companies lay on extra generating capacity during the several days a year we need that extra power — and that extra capacity, which sits idle the rest of the year, is very expensive.

We didn’t need that extra generating power very much this year. Con Ed’s peak load this summer came at 6 p.m. on July 20, when its customers drew 12,316 megawatts. That was about 10.6 percent less than the company had projected as its peak load for the summer. It was also 7.6 percent below the record load of 13,322 megawatts the company hit at 5 p.m. on July 19, 2013.

2015-08 onslo and maisyWhether consumers’ good times will continue is an open question. If natural gas prices spike — as happened in the winter of 2014 — bills could sharply increase. Over time, the state’s increased use of renewables will also have an impact on your bill. You might save a tidy sum of money by putting solar panels on your roof, for example. And don’t forget that Con Edison charges residential customers some of the country’s highest rates.

But the bottom line for summer 2015: If you used the same amount of electricity this year as last year, you’ve saved a few dollars — like these cool cats enjoying the air conditioning and appliances in their Con Edison-powered New York apartment.

Posted in Con Ed, electricity, Uncategorized | Leave a comment

Con Edison wants to own renewable electric generation


Let us back in, Con Edison says.

New York’s push to spread the use of renewable electricity is giving Con Ed an opening to argue that it should dip its toes in the power generating business regulators forced it to abandon in the 1990s.

In papers filed in the Public Service Commission’s Reforming the Energy Vision proceeding, Con Edison says consumers would gain if the state let it own rooftop solar panels and other devices that generate power at homes and businesses.

The company already designs, builds and sells solar and wind generators through a subsidiary, Con Edison Solutions.

Letting Con Edison Solutions own such installations on behalf of its customers would ease the spread of renewable technology, the company says.

Con Ed’s thinking goes like this: Solar panels, combined heat-and-power furnaces, battery storage and other distributed generating equipment is expensive. A big company like Con Edison can purchase and finance such equipment more easily than its customers. That would help homeowners and businesses put the new technology to use, and advance the state’s goal of spreading distributed generation.

Con Ed’s thinking is in line with how solar is usually sold to consumers. Companies such as Solar City, Sunrun,  and Sungevity often retain ownership of the residential rooftop panels they install, and lease them to homeowners.

Con Edison

Solar light poles at East River State Park in Brooklyn

Letting Con Ed Solutions into the business of owning rooftop solar and other distributed generation will give consumers another choice, the company argues. “Customers will benefit from a variety of options and energy choices.  Both regulated and competitive entities will play a role,” Con Ed said in a statement.

Con Ed isn’t looking to get back into the business of running giant fossil fuel and nuclear power plants. When the Public Service Commission deregulated electric markets in the mid-1990s, it ordered Con Ed and other utilities to sell off their big generators. That’s why Con Ed sold Indian Point to Entergy in 2001, and why in 1999 the company sold the famous “Big Allie” generator and other equipment in the Ravenswood station in Queens.

But Con Ed suggests it might like to invest in large-scale renewable generation equipment in New York. In a recent op-ed in an energy industry publication, a company official said Con Ed Solutions could own wind farms and giant solar arrays in the state.

It’s unclear what other utilities think of Con Ed’s views. But in a joint filing in the case, several utilties express hope the PSC will be flexible on the issue.

Consumers have benefitted little from the deregulation of electricity markets. Residential electricity prices are higher, and the energy service companies that were supposed to compete on price have proven no bargain.

But generator owners gained when Con Ed and other utilities were pushed out of their business. Thus they are wary of letting the utilities back in. Independent Power Producers of New York says such a move would be “a major step back from years of Commission policy supporting robust competitive electricity markets.”

State rules would give Con Ed an unfair advantage in the generating business, IPPNY says. The state sets Con Ed’s prices, and could assure that the company would not lose money generating power. IPPNY members, on the other hand, are in a competitive business, and their prices are set in the marketplace. IPPNY countered Con Ed’s arguments in its own op-ed, here.

A coalition of groups representing low-income New Yorkers is also leery of Con Ed’s thinking. It said in a PSC filing last spring that letting utilities make their own power is “short-sighted” because “it will reinforce the role of low and moderate income people as consumers only.” The coalition worries that the working groups in the Reforming the Energy Vision proceeding are “industry-heavy,” and that regular New Yorkers have too little say in how electricity markets will develop.

The generation ownership issue has been bobbing up in REV case filings for months.

PSC officials so far seem ambivalent about letting the utilities own generating equipment.

“Unrestricted utility ownership of DER [distributed energy resources] could, even if immediately successful, stifle the growth of an innovative, competitive DER market for the longer term,” says a PSC staff report issued last year.

But the PSC doesn’t want to close the door to utility ownership of distributed generation. “An absolute prohibition against utility engagement in DER would … deny the potential benefit of DER growth that is needed to develop an asset base for DER markets,” the staff report says.

How the commission will decide the matter is up in the air. The state expects most of the rules resulting from the REV proceeding will be in place sometime in 2016. REV is a big part of the Cuomo administration’s plan to generate 50 percent of the state’s electricity from renewables by 2030.

Update, August 13: Politico New York reports on the issue of utilities investing in large-scale renewables.

Posted in Alternate energy, Con Ed, Deregulation, Public Service Commission | Leave a comment

Why you can’t get Verizon FiOS in New York City


You can’t get Verizon FiOS in much of New York City because Verizon has broken its agreement to build out its network, the city says.

Mayor Bill de Blasio ripped Verizon’s failed promises in an audit released June 18 that says Verizon has failed to comply with its October 2008 franchise agreement with the city. The scathing report “documents far-reaching failures and reveals that more than six years after its agreement with the City, Verizon has yet to deliver on the commitments spelled out in the franchise agreement,” a press release from de Blasio’s office says.

It all comes down to the definition of the word “passed.”

Verizon FiOSUnder the 2008 franchise deal, Verizon agreed that FiOS lines would have “passed” all homes by the end of 2014. “Passed” is a term of art in the cable and communications business that apparently is so common the city and Verizon did not bother to define it in the franchise agreement. That was a bad call by the city’s negotiators: Verizon’s parsing of the word “passed” is in line with Bill Clinton’s parsing of the word “is” in the days of the Monica Lewinsky scandal.

In the audit, the city cites the definition of “passed” used by the Fiber to the Home Council, an industry group:

The number of “Homes Passed” is the potential number of premises to which an operator has capability to connect in a service area, but the premises may or may not be connected to the network. This definition excludes premises that cannot be connected without further installation of substantial cable plant such as feeder and distribution cable (fiber) to reach the area in which a potential subscriber is located.

That’s not how Verizon saw it. It decided the term means:

[G]oing by, past, beyond, or through a place (such as a building), and include[s] no requirement as to how close a place must be approached in order to constitute a ‘passage.’

In practice, the city says, this is how Verizon’s use of the word “passed” has panned out:

Verizon considers all the addresses on a block “passed” if their fiber is in conduit under or on poles over any street that serves as a boundary to that block. Verizon does not deem it necessary for that fiber to have been pulled to a point of entry on the block for the block to be deemed passed.

So the way Verizon sees it, if you live, say, at the corner of West 138th Street and Edgecombe Avenue in Harlem, and Verizon has a FiOS line on Frederick Douglass Boulevard, then Verizon would say FiOS has “passed” your home because its line existed a block away. By this definition, Verizon says, FiOS has “passed” 100 percent of the city’s homes.

Even Time Warner Cable and Cablevision — companies not known for decent customer service — have a better definition of the word “passed.” As the audit explains:

Our understanding is that the cable television industry defines a building as “passed” if it is immediately adjacent to cable facilities and an order for service can be processed by the cable company.

The city got on to this issue because of consumer complaints. As Verizon’s buildout supposedly progressed last year, the city Department of Information Technology and Telecommunications [DoITT] “began to receive anecdotal evidence, largely in the form of consumer complaints, suggesting that Verizon was simultaneously taking credit for ‘passing’ households and declining to accept orders for nonstandard service installations from those households.” A nonstandard service installation is the first installation in an apartment building.

Verizon won’t even go in to buildings in the Manhattan’s richest neighborhoods:

[O]ne property manager from a well-known firm complained that Verizon would not complete the NSI [non-standard installation] at a building on Sutton Place unless 100 percent of the apartment dwellers committed to Verizon FiOS. This property manager also said only two of the eleven multiple dwelling properties he managed had Verizon FiOS and that installations took anywhere from six months to two years.

Verizon’s response to the audit is longer than the audit itself. The company is unhappy that the de Blasio administration is poking around in its business. It said the audit “repeatedly sets forth a variety of irresponsible, inaccurate, and unsupported factual and legal claims about Verizon’s compliance with the Agreement.” Verizon also complains that the audit relies too much on “anecdotal evidence.”

One reason the study is based on “anecdotal evidence” is that Verizon wouldn’t provide the information the city needed to do a firmer audit. To hear the city tell it, Verizon stonewalled its query at every point.

Verizon typically staffed its audit meetings with a battery of attorneys, who regularly interceded between DoITT’s auditors and Verizon’s operational and administrative staff, obstructing and delaying DoITT’s ability to obtain answers to questions and access to documentation and electronic systems.

From the city’s press release:

Currently, some 22 percent of New York City households have no Internet connection; that number jumps to 36 percent for families living in poverty. But even for those who have it, most pay too much for what they get, with the best $40 per month package available to New Yorkers, for example, featuring download and upload speeds that are a fraction of those available in other major cities like San Francisco and Seoul. The lack of competition in the City’s broadband market is one of many issues at the root of this problem.

Verizon FiOS was supposed to compete with Time Warner Cable and Cablevision. So far, its rollout has failed so badly, millions of potential customers can’t even buy it. Now that the city has called out Verizon on its lapses, what action will it take next?

Update: I wrote more on this topic at Politico NY.

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