Con Edison’s business-friendly three-year rate increase

 

Con Edison customers afflicted with some of the nation’s highest electricity prices will suffer more in the next three years.

State regulators gave Con Edison a business-friendly rate hike at a meeting January 24. Commercial businesses will pay a smaller percentage increase than residential customers. And the rate of return allowed on the value of the company’s assets should please Wall Street.

Con Edison residential billsExpect to pay an extra $1.78 per month if you’re a typical New York City Con Edison residential customer who uses 300 kilowatt hours of electricity every month. That 2.27 percent increase will bring your electric bill to $80.30 per month.

Con Edison gas customers will also pay more. People who use gas to heat their homes will see bills jump by about $2.35 per month. That 1.65 percent increase will bring your bill to about $144.66 per month.If you’re a typical New York City Con Ed gas heating customer. [Con Ed did not provide estimates for gas bills for 2018 and 2019.]

Con Edison residential heating billBusiness customers will get a better deal. Commercial customers will pay about 1.27 percent more for electricity. Even better for the business community — Con Ed expects gas bills will decline by about 0.93 percent. [As with the residential heating bill numbers, Con Edison didn’t provide estimates for commercial electric and gas bills for 2018 and 2019.]

All the above assumes that prices of natural gas and of electricity generation hold steady. Those prices are set in the marketplace, and aren’t regulated by the state. Your energy bill might fluctuate as gas and generation prices fluctuate.

Con Edison commercial electric billYou have to factor out the prices of natural gas and electricity to see just how good a deal Con Edison got. The company doesn’t mark up the price of natural gas and generated electricity it buys for you in the marketplace. Instead, it makes its money delivering gas and electricity to you. That part of your utility bill — called delivery charges — is going up a lot.

When the actual cost of energy is factored out, Con Edison got a three-year deal that will boost its electric delivery prices by 3.9 percent in 2017, 3.7 percent in 2018, and 3.6 percent in 2019. Its gas delivery prices will increase by 3.1 percent in 2017, 7.5 percent in 2018 and 6.7 percent in 2019. Those increases are downright inflationary — the government’s consumer price index recorded an annual inflation rate of 2.1 percent in December.

Delivery accounts for about half of your electric bill. But historically low natural gas prices will hide the impact of high delivery rates from most Con Edison customers. It’s not just that home heating gas is cheap. Natural gas is the predominant fuel for New York’s electric generating plants. When the price of gas is low, the price of electricity drops too.

State officials get that the boost in delivery rates is masked by lower energy prices — and admit they are taking advantage of low energy prices to advance some of their policies.

On the gas side of their decision, they expect Con Edison to spend more money upgrading its pipes and other infrastructure. New York regulators are on a push to improve gas safety statewide after a series of explosions and other disasters, including the March 2014 Harlem gas explosion that killed eight people.

On the electricity side, the state expects Con Ed will use the rate increase money on its advanced metering initiative and on programs to expand use of solar and alternative energy.

Another aspect of utility prices little discussed or understood by the public is the rate of return. We customers are only interested in prices. But a utility’s rate of return is the heart of the state’s decision making in setting gas and electricity prices.

Con Edison will be allowed to make a 9.5 percent annual return on what the Public Service Commission figures is the value of its wires, transformers, gas lines and other equipment. That’s a bit higher than the rate granted other utilities in the state. New York State Electric and Gas and Rochester Electric and Gas, two big upstate utilities, were allowed rates of 9 percent in a decision in June. In May, the state gave National Grid’s upstate gas and electric utilities a 9 percent rate of return. National Grid’s gas utility in Long Island and parts of New York City also got at 9 percent rate of return in a three-year case decided earlier this month.

Some consumer advocates argue that 9 percent is too much. In a Con Ed’s 2013 rate case, a consultant hired by the state Utility Intervention Unit unsuccessfully argued that the rate of return should be lowered to 7.93 percent. But utility returns in New York — which has some of the highest electricity prices in the country — are actually below the national  average utility rate of return of 10.13 percent. From the rate-of-return perspective, the prices allowed for Con Edison and other New York utilities a bit on the low side.

The Public Service Commission’s decision — reached in a 3-0 vote, with one abstention — also advances the state’s effort to ease the way for expansion of solar and other kinds of alternate energy sources. From the state’s news release:

“A number of important energy reforms and policy initiatives will move forward under today’s order,” said Commission Chair Audrey Zibelman. “The new plan furthers our efforts to move utilities toward a cleaner, more distributed, customer-centric model for utility service, along with less-costly and cleaner alternatives to traditional utility infrastructure investments.”

Here’s some of what Con Edison had to say about the ruling:

The plan will fund critical infrastructure investments in our gas and electric delivery systems to enhance safety and maintain reliability. Additionally, the plan will support the advancement of smart meters, energy efficiency programs and new technology that will give customers greater control over their energy usage and bills, and help integrate new clean energy technology into the grid.

 

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National Grid NYC gas customers face three years of rate hikes

 

New York City and Long Island residents who buy natural gas from National Grid face a whopper of a price hike. Consumer advocates say the increase that kicked in January 1 threatens the affordability of gas service to National Grid’s poor and elderly customers.

Public Service Commission regulators in December OK’d what they admit is a “significant” rate boost for National Grid’s 1.2 million gas customers in Brooklyn, Queens and Staten Island and 567,00 customers on Long Island.

Even the commission admits this hike is tough to swallow. “[R]ate shock is an obvious concern,” the commission wrote in its December 16 order. Pay attention when the commission’s bureaucrats veer away from their usual dry, technical language and use words like “rate shock” to describe the possible outcome of their decisions.

National Grid NYC gas billsThe graph at the right, based on information from National Grid, shows how the rate increase will affect New York City residents. It includes what National Grid charges you to deliver the gas to your home as well as the cost of the gas itself. According to these numbers, your bill will rise 9.4 percent in 2017, 9.2 percent in 2018, and 10 percent in 2019.

 

The graph at the left looks at similar data for the Rockaways and Long Island. According to these numbers, bills will jump 5.5 percent in 2017, 4.9 percent in 2018 and 5.2 percent in 2019.

Of course, exactly how much you end up paying depends on the price of natural gas. The state regulates what National Grid charges to keep up its system of gas pipes, meters, and other equipment. The price of the gas itself is not regulated, and fluctuates according to market conditions. Natural gas prices remain near historic lows. Government forecasters say heating bills will rise this winter, but still in line with average costs over the last five years.

An interesting point: National Grid’s Rockaways and Long Island customers in 2016 paid gas bills that were about 13.5 percent higher than National Grid customers in the city. By 2019, the company’s Long Island and New York City customers will pay more equal rates.

Another interesting point: a state government source tells NYP&L that even with this increase, National Grid customers in the city and on Long Island will pay less for gas than their neighbors in Con Edison territory.

Also, this source notes, even with the rate hike, lower natural gas prices mean National Grid customers will pay less than they did a decade ago. In 2007, a typical National Grid  gas customer in the city or Long Island paid about $1,680 for gas each year. Under the rate hike, the same customers will pay $1,280 in the city, and $1,406 on Long Island.

Cheap natural gas masks the real size of this rate hike. The Public Utility Law Project and AARP, which argued against the hike, subtracted out the cost of the gas itself and looked at the resulting numbers. By that calculation, National Grid’s take from its New York City customers will rise about 50 percent over the next three years. In 2017, the first year of the rate hike, National Grid will get an extra $272.1 million from its New York City customers, and an extra $112 million from its Long Island customers. The rate hikes in 2018 and 2019 will add to that total.

National Grid says the rate hike will help it spend $3 billion in the coming years improving its gas lines and other infrastructure in New York City and Long Island. That expenditure is in line with a Public Service Commission push to improve gas safety. The state says it wants crack down on companies that fail to fix leaky gas pipelines and other infrastructure.

A tiny part of the rate hike will pay to clean up some of the environmental mess along the Gowanus Canal in Brooklyn and Newtown Creek on the Brooklyn-Queens border for which National Grid is responsible. Some media reports wrongly said the cleanup is a big driver of the rate hike. But in fact, National Grid says, the cleanup will add about 36 cents per month to customers’ bills.

Nonetheless, National Grid’s customers ought to pay attention to this issue. They will pay all of National Grid’s share of the cleanup costs; none of this cost will be borne by the company’s shareholders. Consumer advocates feel the commission set a poor precedent by not requiring the company to pay at least some of the cleanup costs.

Also, it remains unclear how much the cleanup will cost, and how many years it will take. All anyone knows for sure is that the cost will be in the tens of millions of dollars.

Are the new rates fair? National Grid thinks so — it calls the state’s decision “fair and reasonable.”

James Denn, a spokesman for the Public Service Commission, offered this statement about the increase:

This three-year rate plan for National Grid will improve customer service and pipeline safety, fund environmental projects and increase financial assistance to low-income customers. These are the first delivery rate increases in nearly 10 years and since Superstorm Sandy. To be clear, customers’ overall bill will still be less than what an average residential customer was paying 10 years ago.

Another view: “How can you call this anything but rate shock?” asks Richard Berkley of the Public Utility Law Project, which advocates for low-income utility customers. For years, Berkley said, utility companies in the state have won small increases that over time add up to big increases. “Even if they are two percent, two percent, and two percent, they add up to real money. People have to pay them.”

Utility customers in their 40s and older suffer from high utility costs, AARP say in a recent news release:

Nearly six in 10 Generation Xers and Baby Boomers in New York City – and 70 percent on Long Island – say the cost of utilities is having a serious impact on their financial condition, a recent AARP NewYork/Siena College Research Institute survey found.

Con Ed customers are next up on the state’s rate-hike agenda. Expect state regulators to boost Con Ed’s residential gas and electricity prices later in January.

You might want to read this news story about the National Grid rate hike in the New York Post.

 

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Smart meters coming to Con Edison teritory

 

New Yorkers’ relationship with Con Edison will change dramatically in the coming years as the company outfits all of its electric and gas customers with smart meters.

Con Edison’s smart meters will give its customers — and the company — real-time data about electricity and natural gas use. Monitoring apps hooked into the meters could let you know when your spouse turns on the dishwasher, or when your kid cranks up the air conditioning.

Con Edison lags in this technology. About half of American homes already have electric smart meters. New York and Los Angeles are the last of the 10 biggest US cities where smart meters aren’t used extensively.

Con Ed expects to install 3.6 million electric smart meters and 1.2 million gas meters, state documents show. At Con Ed’s annual shareholder meeting May 16, CEO John McAvoy discussed the company’s planned $1.4 billion smart meter investment.

From the company’s press release:

McAvoy noted that a five-year smart meter installation program will begin in 2017. The technology will let customers integrate solar energy, and will offer real-time billing information based on actual energy use. The automated meters also will mean faster repairs during power outages, and enhance efficiency of the electric distribution system.

Con Edison smart metersThe new meters “will fundamentally transform Con Edison’s relationship with its customers by helping them become more active energy consumers,” the company says. “The initiative will provide customers with the information necessary to help manage their energy usage, control costs and help the environment.”

The meters will also help the growth of solar and other technology that lets Con Ed business and residential customers generate their own power. As that technology expands, Con Ed will need to do a better job managing its power grid. Having real-time data from its customers will be a help.

Smart meter data will also give Con Edison a new line of business — selling data about its customers’ energy use.

In a filing with the Public Service Commission in August, Con Edison asked permission to sell the data to community choice aggregators. [It’s so hard to avoid jargon like “community choice aggregators” when writing about this subject.] Community choice aggregators are groups of electric customers who have banded together to share a community solar project, or buy electricity from some source other than Con Edison, such as an energy service company.

The first smart meters are to be installed in mid-2017 in Westchester County and Staten Island. They’ll start to appear in Brooklyn and Manhattan in 2018, and in Queens and the Bronx in 2019.

The New York Post ran this story on the subject in June 2016.

 

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Energy service companies win court battle, may lose war

 

Energy service companies won their court battle against the state’s effort to effectively put them out of business. But their victory is illusory.

A July 22 decision by Albany Supreme Court Justice Henry Zwack, linked here, said the Public Service Commission didn’t give energy service companies a fair hearing before it decided in February to largely shut them out of the residential gas and electricity market. The companies “were simply denied their procedural due process rights,” Zwack wrote. The PSC said its February ruling was built on a staff report and a case it was considering. But Zwack said the order “bears little rational relationship” to its previous decision-making.

Thus Zwack tossed the Feburary order.

But there was good news for the commission’s crackdown: Zwack said the PSC “[c]learly … has the authority to establish public utility rates” and noted that other courts have said it has “the very broadest of powers.” “[The] PSC has jurisdiction over rates charged by retail energy companies,” Zwack wrote.

So Zwack’s ruling left the commission plenty of room to continue its push against ESCOs operating in the residential market.

PSC chair Audrey Zibelman said as much in a statement July 26: “The Court’s decision recognizes the Commission’s authority and firmly sided with the Commission that it is both our right and obligation to protect consumers against price gouging and other abuses.  We will and we must use this authority.”

Zwack’s ruling was a disappointment, Zibelman allowed. But in the end, she sees it as merely a delay. “Unfortunately, as a result of the litigation, ESCO customers are still paying millions of dollars more every month than they should be paying for electric and gas services. But this injustice will be short-lived,” she promised.

Already the commission has barred ESCOs from serving low-income customers.

The Retail Energy Supply Association said it is “gratified” that Zwack tossed the commission’s February order. It noted Zwack’s statement that its members were “stripped of any meaningful opportunity to participate in the promulgation” of the order. The association’s statement was silent on the matter of what steps the commission might take next.

Studies show energy service company prices in New York are far higher than the gas and electricity prices charged by Con Edison and other utilities. Read more about ESCO prices here and here. If you want to dive into the weeds of the issue, try this post from December 2013.

 

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State pushes ahead with ESCO crackdown

 

New York officials are pushing ahead with their crackdown on energy service companies despite legal headwinds. Their latest gambit: barring ESCOs from doing business with low-income people.

A recap: ESCOs are the companies that send salespeople knocking on your door offering you a break on Con Edison’s rates.

Trouble is, they have a long track record of failing to deliver on that promise. Study after study has found that ESCO prices are much higher than the rates charged by Con Edison and other utility companies. On top of that, ESCOs are accused of all kinds of shady sales practices. And for years, energy service companies ignored Public Service Commission efforts to make them more transparent about their pricing.

The Public Service Commission finally got fed up. In February, the commission banned energy service companies from signing up new customers unless they guarantee their prices are equal to or lower than utilities’ full-service plans. The commission made an exception for ESCOs offering “green” electricity produced by wind, solar or other renewable sources. But effectively, the February order would shut down the entire industry.

ESCOs fought back in court, and won a stay of the PSC order that is still in effect. The Retail Energy Supply Association complained that the PSC’s order would have “unintended adverse consequences for the competitive energy market and consumers including loss of jobs, marketplace confusion, uncertainty for customers, and loss of investment by companies integral to increasing customer choice and expanding value-added services for New York energy consumers.”

The PSC seemed happy to push these companies out of the marketplace. State law requires the commission to assure “just and reasonable” utility rates. The PSC found that some ESCOs charge eight times what utility companies charge. “We can’t tolerate that kind of behavior,” PSC chair Audrey Zibelman said at the commission’s February meeting.

A little more on the state’s views of ESCOs’ business practices, from an AARP/Public Utilities Law Project news release:

Last year, 5,044 New Yorkers lodged complaints against ESCOs with the PSC; there were 1,076 “escalated” complaints – complaints not initially resolved by the ESCO. Of those, 30% involved questionable marketing practices, 25% involved dissatisfaction with prices charged – or no savings realized, and 22% involved “slamming” – enrollment of customers without their authorization.

But since the ESCOs persuaded a judge to stay the commission’s order, they’ve pretty much operated as usual.

That brings us to the Commission’s July 15 decision to bar ESCOs from doing business with low-income customers. The commission said ESCOs can not take part in programs run by Con Edison and other utilities that discount service to low-income families. One definition of such customers would be a family of four with income at 60 percent of the state median income, or $51,792 a year.

In meetings with the PSC, the ESCOs admitted “that they were not likely to provide a guaranteed savings to low-income customers,” said Michael Corso, the PSC’s consumer advocate.

If they can’t cut your power bill, what good are they?

Vincent Palmieri, CEO of Bronx-based East Coast Power & Gas, has one answer: Just as folks with money can buy a “Cadillac” health insurance plan, some people want to buy Cadillac energy plans.

“East Coast’s customers seek East Coast out for the premium level, value-added services received in addition to base electric or natural gas supply,” Palmieri wrote in a filing before the commission dated July 13.

“East Coast’s customers are educated and understand that East Coast may be more expensive than the utility’s price,” Palmieri says. In return, he says, East Coast’s customers get quick service when their heat and hot water fail in winter.

In other words, this company promises to get a plumber or electrician to your house sooner when something goes wrong.

Maybe that’s a valid selling point if you’ve got cash to burn and don’t want to call an electrician or plumber yourself. What about the other companies in this business? Are their high-priced electrons and gas molecules better than the cheaper ones sold by Con Ed?

 

Posted in AARP, consumer advocacy, energy service companies, Public Service Commission, PULP | Leave a comment

Con Ed’s summer prices will go easy on your wallet

 

Con Ed’s summer prices are expected to drop again this year compared to last. The company said in a news release May 26 that it expects “slightly” lower prices this summer, thanks to lower prices charged by companies that generate electricity.

From the news release:

“A typical New York City residential customer using 350 kilowatt hours (kWh) per month can expect a 2.4 percent drop from $98.80 in 2015 to $96.47 this year. A typical Westchester residential customer using 500 kWh per month can expect an average decrease of 2.3 percent from $125.38 in 2015 to $122.51. A typical New York City business customer using 10,800 kWh and having a peak demand of 31 kW, can expect average monthly summer bills to decrease from $2,350 in 2015 to $2,264 this year, or 3.7 percent.”

State government has put out a similar message. Statewide, wholesale electricity prices are significantly off their peak in 2008, the Public Service Commission says.

2016-06 Con Ed summer bills graphWholesale electricity prices have been on a long-term downward trend. This chart shows the wholesale power price paid in July by a typical Con Edison residential customer. These figures only apply to part of your power bill. Con Ed charges you separately to deliver this power to your home.

If you want to really get into the weeds of this stuff, here’s the US Energy Information Administration’s short-term price forecast. [The data is updated monthly; this post refers to numbers released June 7.] The numbers here are nationwide, and don’t directly translate to Con Ed bills. But a dive into the government’s data brings up some interesting points.

Nationally, the data shows, wholesale natural gas prices are down significantly over the last year, by about 15.5 percent. That’s important to New Yorkers’ electricity bills. Lower natural gas prices are fueling much of the decline in the state’s electricity prices, since natural gas is the leading fuel in New York’s electric generating plants. Fracking and new gas discoveries have helped drive down gas prices.

To understand how much we benefit from lower natural gas prices, consider that nationally, electricity prices are not down as steeply as in New York. The government says that nationwide, residential prices are down by 0.24 percent over the last year. But other states’ electric grids do not rely as much on natural gas as New York.

What you actually pay depends on how much power you actually use. If it’s hotter this year than it was last year — leading you and everyone else to crank up their air conditioners — your 2016 power bills might exceed what you paid in 2015.

But conservation also plays a role. As the state’s news release notes, the state hit its all-time record load a decade ago. On August 2, 2006, the state’s power plants and transmission wires delivered 33,939 megawatts of power. (If you need to visualize that, one megawatt is enough electricity to power between 800 to 1,000 average-sized homes.)

Peak demand has dropped ever since. A big part of that has come about from efficiency. Bit by bit, those newfangled light bulbs have made a difference in power use. More efficient building heating and cooling systems have also helped.

Government forecasters don’t think the good times will last — they’re forecasting a boost in electricity and natural gas prices next year. And Con Ed is looking to raise its charges for delivering power to your home and running the power grid in 2017. But this summer, you can keep cool for less money.

 

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Albany tries again on utility consumer advocate bill

 

The state Assembly is trying again to set up a new agency called the Office of the Utility Consumer Advocate. The advocate would push for lower rates from Con Edison and other utilities.

Spoiler alert: the bill will probably die in the state Senate.

Assemblyman Jeffrey Dinowitz, a Bronx Democrat, is this year’s lead sponsor of the bill. It passed the Assembly May 11 by a 119-24 vote.

“When you look at the astounding lack of representation that New York’s utility consumers have during rate hike proceedings it is easy to see how New Yorkers pay the highest utility costs in the continental United States,” Dinowitz said in a March 17 news release.

That’s as true now as it was when Albany first considered the idea several years ago. Similar agencies in more than 40 other states are proven consumer money savers. California’s Office of Ratepayer Advocates says that in 2015, it reduced utility bills in the state by $5.3 billion. The agency says that for every dollar it spent in 2015, consumers saved about $191 on their utility bills.

Assemblyman Jeffrey Dinowitz

Assemblyman Jeffrey Dinowitz

Dinowitz’s bill and its predecessors have had strong support in the Democratic-controlled state Assembly. But the idea of a consumer advocate office is not popular in the Republican-dominated Senate. Gov. Andrew Cuomo is also not a fan.

Opponents of a consumer advocate office say that consumer advocacy is the Public Service Commission’s job. It’s true that the PSC is charged with ensuring that utility rates are just and reasonable. It’s also true that the PSC staff is dedicated to investigating utility operations and arguing for fair rates.

But at bottom the PSC is a judicial agency, not a consumer advocate. And those who appear before the agency are overwhelmingly utilities and business groups.

Back in 2013, a Moreland Commission appointed to study the state’s response to Hurricane Sandy recommended the establishment of a utility consumer advocate agency. From the commission’s report:

Invariably, the PSC must weigh the needs of regulated utilities against the needs of ratepayers. But a problem arises when the judge – i.e., the PSC – hears overwhelmingly from well-funded and professional advocates and economists representing business interests but not from consumer interests. This status quo brings to mind the observation of the late Senator Warren Magnuson (D-WA), who said “all anybody wants in life is an unfair advantage.”

But fairness and due process – as there is in judicial proceedings – requires that two sides debate crucial issues involving, say, utility rates, modernizing the electric grid, establishing the right level of capital investments, and storm hardening so the State is not penny-wise-and-pound-foolish when the next devastating Hurricane Sandy hits.

The doom Dinowitz’s bill faces in the Senate seems like another case of legislators listening to the folks who inhabit the Albany insider world — lobbyists — rather than the people who elected them.

If legislators listened to voters, they’d know high utility rates are a big issue. An AARP study last year noted that more than half of New York City voters between ages 35 and 69 worry about their ability to pay utility bills. Another AARP study two years ago found that utilities spend $10 million per year advocating for their interests in Albany.

Lobbyists do their all to keep New Yorkers paying some of the highest utility rates in the nation. Who in Albany will stick up for people who don’t have lobbyists speaking for them?

Posted in AARP, consumer advocacy, Public Service Commission | Leave a comment

Widespread Internet outage hits NYC and region

 

Somebody cut the cord to much of the Internet service in the New York region on May 9, knocking out phone service to 750,000 people, the state says.

The problems began at about 3:09 p.m., according to DownDetector.com, a web site that monitors Internet outages. Service was more or less back to normal around 9 p.m., the site says. But in New York City, Time Warner Cable reported at 9:30 p.m. that it was still having problems which it labeled “a service interruption … due to lost network connectivity.”

Other cable and Internet companies in the Northeast also reported outages. The problems don’t seem to have affected everyone — but they caused plenty of trouble nonetheless. CNN found a pizza parlor in Sunnyside, Queens that lost about $300 in business because its phone and credit card service crashed.

Level 3 Communications, which operates trunk Internet fiber optic lines that serve cable and Internet companies like Time Warner, Cablevision and Verizon, tweeted at 8:09 p.m. that the outage resulted from a fiber cut caused by a third party. It’s unclear where the cut occurred.

2016-05-09 Level 3 Internet outageThis map, taken from DownDetector’s web site at about 9:30 p.m., gives some idea of the extent of the problem. Thousand Eyes, a San Francisco network monitoring company, said on Twitter that the outage impacted Internet users as far away as Salt Lake City and Seattle.

New York state officials plan an investigation of the outage, which they fear affected 911 service. “Service is being restored, and [the state] Department of Public Service will continue to investigate the incident to determine the cause,” the agency said in a statement issued at 9 p.m.

The outage comes amid a state Public Service Commission investigation of telecommunications service in New York. The Commission says its probe will cover “emergency response systems, regulatory oversight, quality of service, consumer protections, and affordability.”

 

Posted in Cable TV, Internet, Time Warner Cable | Leave a comment

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.

 

Posted in consumer advocacy, Public Service Commission, Verizon | Leave a comment

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