New York electricity bills low for upstate industry


From Capital New York:

This will shock every New Yorker fed up with high electricity prices: there’s a class of electric customers in the Empire State that has sharply lowered its costs to below national averages, thanks to effective lobbying and sympathetic state policy.

Read the rest at this link.

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Con Edison solar rules help customers escape high prices


The sun is shining on the solar power business in New York City and Westchester County. One reason is that many people have found that installing solar panels is a good way to beat Con Edison’s high residential and commercial prices. But Con Ed deserves credit: It’s pursuing policies that make going solar easier for its customers.

In 2014, solar panels in Con Ed territory were capable of producing 59.82 megawatts of power. So far in 2015, Con Ed customers have added another 7.7 megawatts. That’s 210 times more solar than was on the system in 2005. When the sun is out, Con Ed solar customers generate enough power for around 27,000 homes. More than 4,700 Con Ed residential and business customers now have rooftop solar setups, the company said in a recent news release.

Con Edison solar growthEveryone watching the utility business expects solar to boom in New York and elsewhere. High utility prices aren’t the only factor. The cost of installing solar panels is falling. A home solar setup can cost $30,000 or more. But the solar industry has come up with financing plans that bring the monthly cost to below your utility bill.

It’s not easy for some utility companies to handle the growth. In Hawaii, sky-high electricity prices helped solar grow so fast, utility companies had a hard time accommodating the power put into the grid by rooftop solar panels. Elsewhere, utilities have fought home solar. Florida adds irony to its Sunshine State nickname with state laws that effectively shut out the rooftop solar panel industry. The state’s utility companies have pushed back hard against anything that makes it easy for homeowners to install rooftop panels.

In New York, the big fight came in the 1990s, when Gov. George Pataki’s administration deregulated electric markets via orders from the Public Service Commission. Many people in the utility industry hated the move, and some [rightly] complained that the state acted without enough public input, especially from the Legislature. Deregulation has probably cost utility customers billions.

But New York’s move may pay off in ways unforeseen at the time it took effect. Deregulation took Con Edison and other utility companies out of the power generation business. Now Con Ed is agnostic about where electricity is generated. The company sees that enabling customers to better use its transmission system is an important goal of its business. For many, the power grid works two ways: They get credit when their solar panels put power into the grid, and pay when they take power out.

And the Public Service Commission is studying new regulations aimed at making it easier for residential and commercial utility customers to use solar and other energy-generating technology. This document offers an easy-to-understand explanation of the aims of the Reforming the Energy Vision effort.

But even without Reforming the Energy Vision, state rules have already let Con Ed customers expand their solar use. In 2014, the company says, 2,138 of its New York City customers installed solar panels; another 1,484 customers installed panels in Westchester. The technology is here, it can save you money, and New York policymakers are trying to make it easy to use.

Update, April 29: This post was edited for clarity.

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Comcast-Time Warner merger collapses


So much for the worries over a Comcast-Time Warner merger. Bloomberg news reported Thursday, April 23 that Comcast is calling off its plans to absorb Time Warner because of federal government opposition to the $45.2 billion deal.

As The New York Times figures it, after the merger Comcast would have ended up with 57 percent of the nation’s broadband market, and just under 30 percent of the pay television market. The deal would have had a big impact across New York. Comcast would have gained 2.2 million Time Warner customers in the state. If the merger succeeded, the New York market would have amounted to about 8 percent of Comcast’s cable and broadband business.

2015-04 Time Warner Comcast logoOne issue raised by merger opponents was that Comcast broke promises made to the federal government when it acquired NBCUniversal. Sen. Al Franken, the Minnesota Democrat and the leading opponent of the merger, cited some of Comcast’s broken promises in an opinion piece for TechCrunch. He notes that Comcast lied about promises to fairly locate cable channels that compete with NBCUniversal’s networks. For example, Franken said, Comcast gave CNBC network a prime spot on its lineup and pushed CNBC competitor Bloomberg TV to the back channels. Franken saw that as a breach of Comcast’s promise to put similar channels near each other.

Franken wrote that if Comcast was allowed to buy Time Warner Cable,

This colossus of a company would have unmatched power to destroy its competition, abuse its customers, and bully the government agencies charged with regulating it. Consumers would face even higher prices, even fewer choices, and, if you can believe such a thing is possible, even worse service.

The merger’s collapse frees New York regulators from their promise to thoroughly review the deal. Public Service Commission officials threatened to block the merger in New York if it was found not in the “public interest.” But the commission never decided the matter. PSC chairwoman Audrey Zibelman said the commission was waiting to see how the federal government handled the issue.

Public Service Commission staff worried that the merged company would “discourage new entries into these markets, stifling technological innovation and further competition, while keeping prices artificially high.” The PSC staff also noted that Comcast promised to boost capital spending on its system if the merger was approved, but did not make any specific commitments. There’s a good argument that the discussion over the merger overlooked some big issues facing consumers, including high prices, poor customer service and misleading bills.

Downplayed in some stories about the merger’s collapse is whether it made economic sense given growing customer defection from cable TV. Lots of cable customers are ditching traditional cable TV in favor of Internet services like Netflix, Hulu, and CBS All Access that offer all the programming they want for a lot less money. With more people getting TV over the Internet, one has to wonder whether Time Warner was worth Comcast’s price.

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Con Edison customers buy more power at higher prices


Despite rising prices, Con Edison customers have been using more and more electricity over the last two decades. The trend ought to please Con Ed shareholders. But it’s tough on New Yorkers’ wallets.

Here’s one reason your Con Ed bill has grown over the years: Adjusted for inflation, the per-kilowatt hour price of Con Ed’s electricity was up 9 percent over the 20-year period from 1994 to 2013. This chart tracks the annual per-kilowatt hour price change, adjusted for inflation into 2013 dollars. Notice that the price was fairly steady — and even declining — for much of the 1990s. But once New York’s policy of utility deregulation hit with full force around 1999, prices began fluctuating and heading higher.

2015-04 shows Con Ed residential prices in inflation-adjusted 2013 money



We grumble a lot about our power bills. These high prices are a big part of that — year after year, Con Edison’s residential prices are the highest of any big-city utility.

But there’s another reason your bill is up: You’re probably using more power. A typical Con Edison residential customer used 405 kilowatt hours of electricity per month in 2013. That’s 17.4 percent more than the 345 kilowatt hours of electricity a Con Ed residential customer used in 1994.

Put together higher prices and higher power use, and an average Con Ed residential bill — adjusted for inflation — was 28 percent higher in 2013 than in 1994.

This chart illustrates how residential power bills have changed over the years. The squiggly blue line, indexed on the left side of the chart, shows how much power a typical Con Edison residential customer uses each month. The squiggly red line, indexed on the chart’s right side, shows how much typical bills changed.

2015-03-20 graph shows typical Con Ed usage and prices 1994-2013


Notice that the squiggly blue line on the second chart peaked in 2004, when a typical Con Ed customer was using about 434 kilowatt hours of electricity per month. Usage has been more or less dropping since then, and seemed to bottom out in the depth of the Great Recession. It’ll be interesting to see if per-customer electricity use fully rebounds from that trough — or if conservation and more efficient electric appliances further cut in to that number.

It will also be interesting to see if Con Edison can continue extracting more revenue from its residential customers, no matter how much power they use.

Con Ed’s rates have been frozen since 2013. Con Ed bosses are now in talks with the state Public Service Commission over whether to extend that freeze through the end of 2016. An agreement would suspend a rate increase request Con Ed filed in January. It would also spare Con Ed an exhaustive state review of its spending that would be aimed at ensuring consumers are paying fair prices.

Of course, Con Ed’s rate increase request only applies to the portion of your bill that covers the cost of the transformers, cables, wires, meters and other equipment that brings power to your home. It doesn’t cover the price of power itself. Con Ed was forced to sell off its generators when the state deregulated electricity back in the 1990s, and now buys nearly all its power on the open market.

So while the transmission part of your bill is still regulated by the state, the price of the actual electricity you use can fluctuate a lot.


Con Edison customers aren’t the only people afflicted with high electricity rates. See my recent piece on Capital New York that discusses the high rates charged by other utilities in the state.

A lot of readers visit this blog looking for ways to reduce their energy costs. I’ve written before that home solar panels are one way to beat Con Ed’s prices.  Solar is not the only game in town — here’s a rundown of the different types of technology available to utility customers.

Be wary of energy service companies — better known as ESCOs — which say they can lower your Con Ed bill. They can’t back up their claims of lower prices, and the state has struggled to figure out how to make their pricing more transparent.

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Con Edison wants big electric rate increase


Con Edison wants a big electric rate increase in January 2016. It filed with the New York Public Service Commission on January 30 for a one-year rate hike it says will boost electric charges an average 3.2 percent.2015-01 Con Ed 2016 Rate Proposal

What you’ll really pay depends a lot on who you are and how much power you use. It’ll also depend on the price of electricity itself, so be skeptical about Con Ed’s claims about the overall size of the rate hike. In the end, you may pay more or less, depending on energy prices. Con Ed doesn’t control its supply charge, which is based on the price of the electricity it buys from generating companies.

But you can take to the bank Con Ed’s statements about the delivery charges, which it wants to raise an average 7.2 percent. That’s what the case is really about. You’d be right to question whether anyone in Albany will let the company raise its delivery rates by 7.2 percent, which is far ahead of the general inflation rate.

Keeping all that in mind, let’s go to the Con Ed press release:

A typical bill for a New York City residential customer using 300 kWh per month would rise from $82.06 to $85.94, an increase of 4.7 percent (7.9 percent for delivery).  A typical bill for a Westchester residential customer using 450 kWh per month would rise from $114.98 to $119.68, a 4.1 percent increase (7.2 percent for delivery).  For a typical commercial customer using 10,800 kWh per month with a peak demand of 30 kW, the monthly bill would rise from $2,173.08 to $2,236.71, a 2.9 percent increase (6.5 percent for delivery).

Note that the proposed delivery charge increase is higher for New York City residential customers — 7.9 percent — and lower for commercial customers — 6.5 percent.

Cliche alert: This post is about to use the phrase “kabuki dance.”

It takes 11 months for the Public Service Commission to decide big rate cases like this. So now the PSC and Con Ed will enter into a long kabuki dance over whether the rate increase is fair, whether the company’s expenses are in order, and myriad other issues.

Like an, uh, kabuki dance, the whole thing will be choreographed in a way well understood by the participants.  The PSC’s staff will investigate as best it can whether the company’s spending is in line with customer needs. Con Ed, advocacy groups and others with a stake in the company’s pricing will argue for and against the request.

One thing worth noting about Con Ed’s proposal is that it asks for a 10 percent return on equity, which is the percentage return the company is allowed to make from the estimated value of its gas mains, transformers, transmission wires and other infrastructure.

Con Ed’s current rates, which will stay in effect at least to the end of 2015, allow for a maximum 9.8 percent rate of return. So though it wants to increase your delivery charges by an average 7.2 percent, the company expects little of that increase will land on its bottom line. Con Ed says it plans to spend most of the $368 million it would raise in the increase on storm hardening and other infrastructure upgrades.

It’s early days yet for this case. Con Edison has already filed hundreds of pages of documents with the Public Service Commission. It’s not light reading. Here’s a fact sheet with some wonky information about the proposal. And here’s a link to the PSC case file on the proposal.


It’s a fair question whether consumers will be adequately represented in this rate case. Gov. Cuomo’s Utility Intervention Unit has been criticized by advocates as underfunded and not aggressive enough in its representation of average ratepayers. The Public Service Commission’s staff does exhaustive study of rate cases, but not necessarily with consumer interests in mind.

One voice likely to be missing in the Con Ed case this year is Gerald Norlander, who is retiring as executive director of the Public Utility Law Project. Gerry advocated for low-income people. But he was often a de facto advocate for all New Yorkers, given the poor state of consumer advocacy in New York utility cases. He was also a valuable source for reporters who cover New York utility issues. NYP&L wishes him a long and happy retirement.

Update, February 1: See my story about the new Con Ed rate case in the New York Post.

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State seeks to improve aid to New Yorkers who can’t pay utility bills


Lots of New Yorkers can’t pay their utility bills.

As of November, 1.2 million people were 60 or more days behind with Con Edison, National Grid and other utilities. Their total arrearages topped $756 million. Last year, electric and gas companies cut service to 277,000 customers, and wrote off $195 million worth of bills they expect to never collect, Public Service Commission data shows.

Sometimes falling behind leads to tragedy. Three Bronx children died in an October 2013 fire set off as they played with candles their mother set out after Con Edison cut power to their apartment for nonpayment.

The Commission wants to improve its programs to help low-income people with their utility bills. It has ordered its staff “to conduct an investigation of utility low income programs, to identify best practices, and develop a set of recommendations for how best to optimize” the programs.

In a statement, PSC chair Audrey Zibelman said the review will “assess the adequacy of the Commission’s low-income programs to ensure regulated utilities adhere to best practices in regards to the services provided to all low-income customers throughout New York. The review will provide the opportunity to standardize utility low-income programs to reflect best practices and will help inform future rate cases, improve transparency, and help stakeholders, especially low-income advocates, participate more fully in the process.”

Low-income people get a variety of discounts on their utility bills. The appendix to the Commission’s January 9 order establishing the proceeding shows the variation between different utility companies.

Con Edison, for example, gives low-income electric customers a $9.50 monthly discount. It discounts gas bills according to low-income customers’ use. In National Grid’s upstate territory, low-income people get a flat $5 per month discount on their electric bills, a $15 per month electric bill discount if they use electricity for heat, and a flat $10.50 per month discount on their gas bills. [If you pull up a copy of the order, note that the Commission still refers to National Grid’s upstate territory by its old name, Niagara Mohawk.]

Eligibility rules vary. Some utilities enroll those in the state’s Low Income Home Energy Assistance Program. Others, including Con Ed, take customers from a variety of programs, including Food Stamps and Medicaid.

The commission wants more consistent rules that would make its rate cases easier to handle. “We expect a majority of the utilities to have rate cases pending before the Commission in 2015,” the January 9 order says. “While low income programs, in aggregate, account for less than 0.8% of utility revenues, a substantial amount of time is spent by the parties in rate cases litigating or negotiating settlement of low income program designs and funding levels. This proceeding is expected to assist the parties, especially low income advocates, in efficiently managing their finite resources.”

AARP, the Public Utility Law Project, NYPIRG and Consumers Union issued a joint statement calling the Commission’s decision a “major and unprecedented step that could help millions of utility consumers across New York State.”

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Home electricity and heating costs forecast to drop this winter


Expect lower electricity and heating costs in New York this winter, government energy experts say.

Electricity prices statewide should be about 20 percent lower this winter compared to last winter, the Public Service Commission says. In a news release October 23, the commission also forecast lower natural gas prices, though it didn’t say by how much. Con Edison says the price of natural gas for heating should be about 10 percent less than last year.

Lower prices are expected despite the fact that the natural gas industry appears to be a long way from solving the shortage of pipelines serving New York and New England. The pipeline shortage combined with frigid weather led to a shocking spike in electricity and natural gas prices across the state last year.

There’s plenty of gas available, notwithstanding New York’s reluctance to approve fracking in the western part of the state. Getting it to customers remains a problem, the US Energy Information Administration says. But the EIA’s forecasters do not believe the shortage will be as much of an issue this year. They do say, however, that supplies remain tight in New York, and are even tighter in the New England states.

Nationally, natural gas prices will drop about 5 percent from last winter, and electricity prices will drop 2 percent, the EIA forecasts. People who heat with oil can cheer too. Their costs should drop about 15 percent, thanks to the global collapse in oil prices.

Whether the Energy Information Administration estimates prove accurate depends on the weather. If temperatures are 10 percent colder than forecast, electricity prices will rise 2 percent, and natural gas prices will rise 6 percent. If temperatures are 10 percent warmer than forecast, electricity prices will drop 5 percent and gas prices will drop 12 percent.

Maybe you’re thinking about switching to an energy service company, or ESCO, to shave your electric or gas bill even further. Think carefully – there’s no evidence these companies have met their promise of lower gas and electricity prices. Also, keep in mind that ESCOs mark up their prices to make a profit. Con Edison and other utilities sell you gas or electricity at cost.

In its October 23 news release, the Public Service Commission suggests consumers worried about price spikes like the one last year could sign up for an ESCO’s flat-rate plan. The commission has successfully encouraged ESCOs to offer more such plans. “In Con Edison’s service territory … only five of the approximately 60 ESCOs offering electricity, offered fixed price products last year,” the release says. “Now, nearly 40 ESCOs in Con Edison’s service territory offer fixed-price electricity products.”

However, the plans may be a bad deal for you. If the state and federal forecasters are right that prices will drop this winter, why would you lock in a high price with one of these plans? Certainty costs money. You should approach these plans skeptically.

If you must go with an ESCO, start by visiting the state’s Ask PSC site. You can compare advertised prices on the state’s Power to Choose site. But I’m going to stay it again – be skeptical. The information on the Power to Choose site won’t tell you what you will really pay if you take an ESCO’s deal, and the state has still not figured out how to give consumers reliable information about ESCO pricing.

Keep in mind: Whether or not you go with an ESCO, you’ll still have to pay utilities like Con Edison to deliver your electricity or gas. There’s no escaping the power company.

Update, October 25: This post has been edited for clarity.

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Prices up, but cool weather eases summer Con Edison electric bills

2014-09-16 Con Ed summer bills graph

New York had fine summer weather this year — not too hot, and only a few days when temperatures jumped into the 90s. Electricity prices were up a bit this summer, but you probably used your air conditioner less. That means you bought less power, and thus shaved a few bucks from your Con Edison electric bills.

Con Ed’s data tells the story. This graph shows the cost of electricity in July 2014 was lower than in July 2013. Customers who used 300 kilowatt hours of power in both July 2013 and July 2014 paid 5.2 percent less this year than last.

But the good times did not last all summer. Con Ed prices in August 2014 were higher than in August 2013. Customers who used 300 kilowatt hours in both August 2013 and August 2014 paid 10.6 percent more this year.

Generation costs drove the difference. Con Ed’s charges to maintain wires, cables and transformers — labeled as delivery charges on your bill — changed hardly at all this year. In February, the Public Service Commission froze that part of your Con Ed bill for this year and next.

But supply charges — what Con Ed pays generating companies — have fluctuated. During the summer of 2013, generating companies’ charges spiked when the weather got hot in July. Cooler weather helped keep generating companies’ prices steady from July to August in 2014. But overall, generators’ prices were slightly higher this summer than last.

For an imaginary customer who uses 300 kilowatt hours of electricity every month, July and August bills in 2014 were about 2 percent higher than July and August bills in 2013. But hardly anyone uses the same amount of electricity one month to the next. This summer’s cool weather meant people used less electricity to run air conditioners. Because they used less, their bills were probably slightly smaller, despite this year’s higher prices.

All of the above assumes you bought your power directly from Con Edison, and not from an energy service company. There’s no reliable data on energy service companies’ prices, but they are probably higher than Con Ed’s charges.

Con Ed’s own data shows it delivered a lot less electricity during the summer of 2014 than the summer of 2013.

Cool summer weather lowered electricity use and eased Con Ed electricity billsThis graph shows the total number of megawatt hours Con Ed sold in July and August both years. You can see that electricity use was off quite a bit this year. Con Ed sold 8 percent less electricity in July 2014 than in July 2013. It sold 2 percent less electricity in August 2014 than in August 2013. Added up, the numbers show that total electricity sales in Con Ed’s territory in New York City and Westchester County was down 5.2 percent in July and August 2014 compared to the same period in 2013.

Here’s a fun way to understand just how much less power Con Ed customers used in the summer of 2014: Imagine that everyone who lived in 1.78 million apartments in New York City simply packed up and headed for the Hamptons or the Jersey Shore or the Catskills for all of July. That’s the figure you get when you divide the drop in electricity usage in July by the 300 kilowatt hours used in a typical apartment each month.

If the 1.78 million figure sounds outlandish, understand that most of the power Con Edison sells goes to businesses. In 2013, Con Ed told investors that 70 percent of the electricity it sells goes to commercial customers, and 2 percent goes to industrial customers. The company’s residential customers use just 28 percent of the power it sells. The city’s office buildings, shops and businesses use far more electricity than its residences.


Most readers come to this blog looking for information on how to lower their electric bills. Over the last few months, I’ve written several news articles about how alternative energy technology is rapidly becoming cheap enough for home use.

This article in The Wall Street Journal discusses how Con Ed’s high electricity prices are expected to spur more of its residential customers to install home solar electric generating systems. I also wrote a story for about how to finance home solar setups. This story discusses solar and other alternate energy technologies that are ready for home use.

I really liked this recent story in The New York Times about how solar and wind power are cutting into the traditional electricity generating business.  Alternative energy isn’t so alternative anymore.

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Sunny days ahead for solar electricity in New York


Alternative energy isn’t a big part of the electric power mix in New York. Renewables like solar, wind, and biomass account for just 6.5 percent of the electricity generated in the state. The US Energy Information Administration says natural gas is the most-used fuel for electricity generation, followed by nuclear and hydro.

2014-04 NY elecricity generation by source from EIASolar will be a bigger part of the mix in coming years, say electric industry experts. Analysts at Sanford C. Bernstein, a Wall Street research firm, say solar electricity is poised for big growth. And surprisingly, Bernstein says, New York is a prime market for solar – even though our weather isn’t as sunny as Arizona or Florida.

One reason for New Yorkers to seek power from the sun is high Con Ed electricity prices. Electricity costs so much in New York that it’s cheaper for Con Ed customers to get electricity from solar panels, Bernstein says. The firm figures solar could end up taking 14 percent of Con Ed’s electricity revenue.

Nationwide, Bernstein says, home and business solar panels contribute just 0.2 percent of the US retail electricity supply. But the firm’s researchers say home and commercial solar electricity installations are increasing at a rate of around 50 percent per year. It expects solar to keep growing at that pace as the price of solar equipment comes down.

New York regulators are trying to figure out how to accommodate solar and other alternate energy sources, and are seeking advice from consumers and the energy industry. [Here is my earlier post on the topic.]

But New York is already well ahead in the game.

The state passed a law in 1997 providing for net metering, which requires Con Edison and other utilities to account not just for the electricity its customers take from the grid, but also for the power they put back into it. The state’s decision in the mid-1990s to deregulate electricity markets – which likely has raised electricity prices – has aided the growth of solar and other alternative energy sources. Because of deregulation, Con Ed today generates very little power. Its main business now is maintaining the local electric grid. Deregulation has made the company agnostic on whether electricity comes from big power plants in Astoria or home solar panels.

Plenty of businesses are getting in on the solar trend. Companies like Sunrun and Solar City will arrange financing and hire local contractors to install home solar systems. You can get a solar setup with a lease, or you can buy one outright with a loan or cash. If you lease a system, you make a monthly payment similar to an electric bill. The installer retains ownership of the system, and will come around to your home every few months to make sure everything works properly.

Of course, solar isn’t the only possibility for homeowners. See my story for more on how new technology will let you make your own electricity.


Posted in Alternate energy, Deregulation, electricity, Public Service Commission, Solar | 1 Comment

State swears it can improve New York’s cable and Internet service


Cable TV and Internet operator Comcast is raising its profile in New York. For one thing, it wants to pull the GE sign from atop 30 Rockefeller Plaza, and put its name up in its place.

Comcast-LogoBut the biggie is Comcast’s wish to take over Time Warner Cable, the state’s dominant cable and Internet operator. Time Warner operates in nearly all of New York’s 62 counties. It’s in four of the five New York City boroughs — it serves all of Manhattan, Queens and Staten Island, as well as the northwest corner of Brooklyn.

The merger faces a gantlet of reviews by Washington bureaucrats and politicians. It also faces scrutiny in New York, thanks to a state law passed in April that gives the Public Service Commission the power to veto cable franchise agreements if they are not in the public interest.

What does that mean? Public Service Commission chairperson Audrey Zibelman explains: “To determine whether the proposed transaction is in the public interest, the Commission will examine the proposal to ensure services the merged company would provide will be better than the service customers currently receive.”

Another clue about the state’s intentions for the merger, from a press release by Gov. Cuomo’s office last month:The PSC will critically review the protections being offered to low-income customers as well as how the proposed merger might impact consumer pricing and telecommunication competition overall.”

Almost everybody hates the cable company.  A study last year found that consumers are more likely to curse when they call the cable company than almost any other business. The only companies that hear more cursing from clients are home contractors and — get this — satellite TV companies.

Who can blame us customers for hating the cable people? If you’ve ever looked at your cable bill, you might wonder what all the fine print means. A few months ago, I couldn’t get a Time Warner phone rep to explain why I was paying $10 per month for something called a “variety pack,” one of several unexplainable items on my bill.

This 2013 report by the American Customer Satisfaction Survey found only one company in America more hated than Time Warner Cable or Comcast — it is the Long Island Power Authority. In the ACSI’s 2014 report, the companies performed even worse. From the report:

Time Warner Cable lags behind the entire industry following its second consecutive yearly  decline, down 7% to an all-time low of 56. The combination of low and downward-trending customer satisfaction for both Comcast and Time Warner Cable is cause for concern amid merger talks between the two companies. The issue at stake is not that the proposed merger will limit competition as the service territories of the two companies do not overlap. Instead, it is the question of whether a combination of two pay-TV providers with such poor records could possibly create a better customer experience, especially given the volume of evidence from ACSI data suggesting that mergers in service industries tend to damage satisfaction—at least in the short term.

Time Warner and Comcast offer several justifications for the merger in this May 15 PSC filing. One is: “The transaction will have no negative effect on competition.” That’s because there’s no competition now between Time Warner and Comcast, the petition says. The corollary, of course, is that the merger won’t have a positive effect on competition either.

The companies’ PSC filing offers some upsides for Time Warner customers, such as better phone service. Comcast is also promising to improve Time Warner’s transition to all digital service, which it says will give customers more Internet bandwidth and faster data speeds.

Comcast offered me this comment on the state’s role in the merger: “We’re cooperating with local and state groups on related inquiries and look forward to these opportunities to further share the consumer benefits of the transaction.”

The state is giving you a chance to gripe about the merger in person. It plans a public statement hearing on the merger on Thursday, June 19, at the Public Service Commission’s Manhattan office, at 90 Church St. The event includes an informational forum at 6 p.m., followed by the hearing at 7:30 p.m.

For a take on another aspect of this issue, check out this Huffington Post story by Bruce Kushnick of the New Networks Institute.

Comcast and Time Warner aren’t the only data and Internet game in town. Check out my Wall Street Journal story on how Verizon has gone all digital in part of the Rockaways in Queens.

Update, July 19: Check out the presentation by New York’s Utility Project at the PSC’s hearing on the merger held July 18 in Albany.

Update, October 2: The PSC has put off a decision on this case to November 13.

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