New York has the second highest electric rates in the nation and many ratepayers are frustrated by the poor service restoration following several major storms. As a result, Assembly Speaker Sheldon Silver today announced the recently approved SFY 2014-15 Assembly budget creates the state Office of Utility Consumer Advocate to provide residential consumers with an independent voice to represent their interests during state and federal regulatory proceedings.
"For too long, utility companies have had the upper hand on consumers. The absence of ratepayer representation during regulatory matters has been abysmal for consumers," said Silver. "The proof is in the monthly electricity costs of New Yorkers. On average, our electric bills are higher than just about every other state. With this measure, we remove the unfair advantage utilities enjoy presently, bring fairness to the rate- making process and establish a long overdue independent voice for the state's utility consumers."
Silver commended Consumer Affairs Committee Chair Jeffrey Dinowitz and Energy Committee Chair Amy Paulin for their work on this budget legislation and commitment to restoring balance between ratepayers and utilities through the creation of the Office of Consumer Utility Advocate, an entity that exists in 40 states and the District of Columbia.
"Under the state's current regulatory system, which requires the Public Service Commission to weigh the concerns of both residential consumers and the interests of utilities, it's fair to say that ratepayers have been repeatedly squeezed by an unfair regulatory process," said Dinowitz. "In states that have a Utility Consumer Advocate, where consumer interests are on equal footing with those of utility companies, utility costs are much more reasonable. I urge the Senate and Governor to support this budget proposal."
"For years, New York's ratepayers have lacked necessary consumer representation on energy issues, despite the transition to a mostly deregulated energy industry," said Paulin. "Lacking a meaningful voice before state and federal regulators, New Yorkers have sustained increased energy costs that have reduced buying power and made our state less competitive. The creation of a Utility Consumer Advocate office is a sound investment that will produce savings for ratepayers. The inclusion of this office into this year's budget resolution demonstrates the Assembly's commitment to consumers."
This budget measure, which is modeled after a bill (A.6239) the Assembly approved last year, would provide residential utility consumers with an independent representative during all state and federal regulatory proceedings involving utility companies that offer electric, natural gas, internet, cable TV, telephone and wireless communication services. The measure would require the Utility Consumer Advocate to be appointed to a six year term by the governor, subject to the approval of the state Senate.
Among the 50 States, New York has Second Highest Electric Rates
Silver noted that New York's high electric rates are second only to Hawaii and in those states that have a Utility Consumer Advocate, ratepayers have experienced significant savings on monthly utility bills.
"Poor service restoration following a major storm is another unpleasant reality consumers must face in a regulatory system that favors utilities. My Assembly colleagues and I believe that if a Consumer Utility Advocate office had been in place prior to Superstorm Sandy, Hurricane Irene and Tropical Storm Lee utility emergency response plans would have been better focused on meeting the needs of consumers," said the Speaker.
Consumer Interests Overshadowed by Utilities
Silver also recognized Assemblymembers Steve Englebright, Joan Millman and James Brennan for their interest in advancing legislation that removes the significant advantage utilities now have over consumers in state regulatory matters.
"Implementing the Office of the Utility Consumer Advocate would be a tremendous step forward for all New Yorkers," said Assemblymember Steven Englebright, Chair of the Government Operations Committee. "New Yorkers currently pay some of the highest utility rates in the country and those rates continue to rise at an unsustainable pace. Creating this office would offer New Yorkers the strong, independent ratepayer-focused voice currently missing in decisions relating to utility rates and proposed increases."
"Seniors are often hit particularly hard by unreasonable increases in utility costs, typically because they live on a fixed income. It is a tragedy when a senior, when anyone, has to choose between adequate food and keeping the heat and lights on," said Aging Chair Assemblymember Joan Millman.
"This bill ends the one-sided and monopolistic advantage utilities have enjoyed in the current rate making process for decades. Regulators will have to tell the utilities to move over and make room at the table for ratepayers because they now have a far greater voice in the process. Thanks to this measure, no longer will the deck be stacked hopelessly against consumers," said Brennan, chair of the Corporations, Authorities and Commissions Committee.
An Independent Utility Consumer Advocate
In addition, to ensure the independence of the state Office of the Utility Consumer Advocate, the Assembly's budget measure calls for the office to be an independent state agency.
"The Assembly Majority strongly believes it is in the best interest of ratepayers for the Office of the Utility Consumer Advocate to be a stand-alone agency. As an independent entity, this office would be truly free to challenge effectively the claims of utilities and advocate solely on the behalf of consumers," said Silver.