State comptroller report shows hidden electric bill costs

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It’s no shock that a state report issued today found the New York Power Authority, which operates electric generators and transmission lines across the state, is not run as efficiently as ratepayers might like. For one thing, 35 percent of its staff — 570 of its 1,636 employees — earn salaries of $100,000 or more. By comparison, just 8 percent of state employees and 14 percent of all New Yorkers make that much.

The salary bloat, and the authority’s ownership of a $6 million aircraft it says is necessary to inspect its upstate power plants, will make the headlines. But the real ripoff is how state government uses NYPA as a piggy bank that subtly boosts everyone’s electric bills.

Over the last decade, State Comptroller Thomas DiNapoli reports, NYPA has shipped $1.2 billion to the state’s general fund — an average of $120 million a year. Some years, NYPA forks over more; some years less. In the current fiscal year, NYPA will give the state $90 million.

This is one of a bunch of hidden taxes on your Con Ed bill, stashed so deeply on its back end it’s impossible to say exactly how much it’s costing you. But to get an idea, divide out the $120 million figure by the state’s 19.6 million residents. That yields a result of about $6 per person per year. Upstate people might pay more, since that’s where most of NYPA’s generators are located. But the authority has assets all over the state, so every electric ratepayer pays something.

Elected officials have several reasons for liking this kind of hidden tax. For one thing, few people will bother to figure out how much it’s costing them. For another, it doesn’t require an up-or-down vote that might be used in negative campaign ads.

And even better, as DiNapoli notes, it’s actually described in the law as something of a donation. Under typical state budget language, NYPA, “as deemed feasible and advisable by its trustees, is authorized and directed to make a contribution to the state treasury to the credit of the general fund in an amount of up to…” What’s “feasible and advisable” is no doubt influenced by the fact a majority of the NYPA board are gubernatorial appointees. Forgotten is that this “contribution” really comes from the pockets of people across the state.

City taxes on utilities’ real estate is another example of a hidden levy elected officials hope you won’t notice. Con Edison is the biggest single property tax payer in the New York City — property taxes cost the city’s electric ratepayers about $1.1 billion a year, according to documents in Con Ed’s current rate case.

Con Ed’s property tax hit is sky-high because it pays the tax at a far higher rate than homeowners. If Con Ed, homeowners and businesses all paid at the same rate, electricity prices might be lower — but the mayor and city council might be forced to enact a politically damaging tax hike to make up for the lost electric bill cash.

Hiding taxes in your utility bill is a great strategy for elected officials. It’s better for the politicians to let NYPA and Con Ed be hated for high electricity prices than for them to be blamed on Election Day for raising taxes. No one cares that it all comes from the same pockets anyhow.

Here’s a link to DiNapoli’s report.

About Bill Sanderson

I'm a New York-based journalist, and a former reporter at the Concord Monitor in New Hampshire, the Bergen Record in New Jersey, and the New York Post. My work has appeared in The Wall Street Journal, MarketWatch.com and Politico New York. Twitter: @wpsanderson.
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