Schumer asks FTC to investigate skyrocketing electric bills

Posted 2 April 2014 at 12:00 am

Press release, U.S. Sen. Charles Schumer

U.S. Senator Charles E. Schumer is urging the Federal Trade Commission to investigate the sharp increase in electric prices that residents across Upstate New York have been forced to pay over the course of this winter – and that they will continue to pay for several more months.

Schumer is calling for an investigation by the FTC, which works to promote consumer protection and eliminate anti-competitive business practices, in light of the fact that electric bills have risen to extremely high rates this winter – including bills that came close to doubling in some parts of Upstate New York.

Schumer noted the example of a Syracuse-area National Grid customer who was charged $67.68 in February 2013 and $65.02 in March 2013, and then charged $84.58 in February 2014 and $106.80 in March 2014 – despite using substantially less electricity than last year over the same period.

Utilities throughout the state have attributed the increase to record-low temperatures and high demand for natural gas, but Schumer said that the size of the rate increases were so high that he is concerned it outpaced the actual increase in wholesale energy costs for utilities.

Therefore, he is asking the FTC, in conjunction with the Federal Energy Regulatory Commission (FERC) and the Department of Justice (DOJ), should it become necessary, to investigate the entire wholesale electric and natural gas markets to ensure that these markets were on the level, and that customers were not being improperly overcharged.

Schumer explained that there are multiple ways utilities or natural gas providers could artificially inflate electric bills – including withholding natural gas from the market or overcharging ratepayers – and asked the FTC to look into all possible angles as part of its investigation. The NYS Public Service Commission (PSC) has similar concerns, and also petitioned FERC to investigate.

“As the thermostat went down this winter, electric bills shot up,” Schumer said. “It is typical for electric bills to go up during the winter months, but this year’s sky-high increases are more than what would be expected.”

According to an AARP Report “David v. Goliath; Why consumers are losing New York’s utility game,” New York’s investor-owned utilities and the Long Island Power Authority charge some of the highest rates in the country. In September 2013, New York’s residential customers paid 19.57 cents/kwh, which is 56% higher than the national average and the second most expensive after Hawaii. And, prices rose from September 2012.

According to media reports, data collected from actual customers for each utility, and other sources, electric rates at the major utilities have skyrocketed this winter:

National Grid – on average, about 60-75 percent increase this winter;

NYSEG – on average, about 10-15 percent increase this winter;

RG&E – on average, about 15 percent increase this winter;

Con Ed – on average, about 20-25 percent increase this winter;

Central Hudson –  on average, about 35 percent increase this winter;

Long Island (PSEG) – on average, about 25 percent increase this winter.