'A declaration of war': NY needs new utility regulator, lawmakers say

ALBANY — The state commission that decides if gas and electric rates will go up and by how much is facing fresh scrutiny from Democrats in the state Legislature, who have begun talks on replacing and restructuring it.

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The Public Service Commission regulates public utilities in New York, including electricity, gas, water and the telecommunications industry.

 

“At this point for me, this is a declaration of war on the Public Service Commission,” said state Sen. James Skoufis, a Democrat from Orange County. “They are a pathetic excuse for a regulatory body here in New York state.”

 

Companies that distribute energy to ratepayers, like National Grid or Con Ed, have to get authorization from the commission when they want to increase rates. 

 

The burden is on the utility provider to make its case for the requested rate hike. The state Department of Public Service, under which the commission is housed, is then supposed to review the request and represent the public interest.

 

The final decision on whether to approve, reject or adjust a requested rate hike then falls to a vote of the commission’s seven members.

 

Outside parties can also seek to intervene in that process on behalf of an interested party, including a consumer or environmental advocacy group. AARP New York regularly intervenes in those cases, for example.

 

Elected officials can make their position heard on proposed rate increases as well, but state Sen. Shelley Mayer, a Democrat from Westchester County, said that often falls on deaf ears.

 

“I have tried the incrementally nice approach. I have tried it for several years. I have been fighting with the (commission) for years,” Mayer said. “We are at the end of our rope.”

 

The consistent increases in utility bills have shown that the commission can’t effectively curb costs for consumers, Mayer said. There’s now appetite for something new.

 

“We need a wholesale change in the way utility rates are regulated and determined in the state of New York,” Mayer said.

 

The plan would be to scrap the commission and replace it with an entity that could more tightly regulate utility companies. Lawmakers don’t yet know what that would look like but plan to push for a path this year.

 

“We have to be thoughtful. We have to be intelligent about what the alternative is, what the restructuring looks like,” Skoufis said. “We are just at the point now when we know it has to happen.”

The system benefits utility companies as it’s structured now, Skoufis said. Utility companies often justify rate increases by pointing to new infrastructure costs. But that spending is not audited by the state, he said.

 

If they’re not able to overhaul the current commission, Skoufis said, the plan would be to closely scrutinize any appointments made by the governor in the future. Those have to be confirmed by the Senate.

“I will not support any new nominees that are like-minded and don’t look to flip over tables; I will actively, strongly oppose any of those types of nominees,” Skoufis said.

 

Skoufis and Mayer plan to push legislation that would place a cap on the profits of utility companies, place more oversight on storm response and more.

 

Republicans in the state Legislature are aligned with Democrats on a desire to lower utility bills but they’ve argued that the cause won’t be fixed through new regulations or a replacement agency.

 

If Democrats want to keep utility bills from rising, all they have to do is look inward, Senate Minority Leader Rob Ortt said Tuesday. He blamed the state’s energy woes and uncertain future on renewable energy mandates approved by Democrats in 2019.

 

“We have to pour more money into the grid, into the infrastructure,” Ortt said. “That requires cost and the utilities aren’t going to just pay for it themselves because they want to make money.”

 

Utility companies have cited the state’s renewable energy mandates as a driver for rate increase requests alongside other needs. Aging infrastructure, including transmission lines and plants used to produce fossil fuels, is also a common reason. The state has never released an analysis of the impact of those mandates on the bills of ratepayers.

 

It’s possible that the Legislature will negotiate some kind of relief for ratepayers in this year’s state budget, which is due April 1, but that wouldn’t include an overhaul of the commission.

James Denn, a spokesman for the Department of Public Service, said in response to the lawmakers’ remarks that the agency does not comment on proposed legislation.

 

Dan Clark

Capitol Bureau

Dan Clark is the author of the Capitol Confidential newsletter and covers New York government and policy for the Times Union. Clark has covered New York government, politics and policy for more than a decade. Before joining the Times Union in 2024, Clark was the managing editor of WMHT’s “New York NOW” and had stints at PolitiFact, the New York Law Journal and Capitol Tonight. You can reach him at Dan.Clark@timesunion.com.

 

New York's utility rate regulator should be replaced, lawmakers say

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