Lawmakers Propose Hudson Valley’s First Public Energy Company

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Upstate New York could soon have its first publicly-owned energy company.

Introduced by Senator Michelle Hinchey and New York Assemblymember Sarahana Shrestha, the Hudson Valley Power Authority Act is a state bill that proposes acquiring Central Hudson Gas & Electric Corporation and operating it as a publicly-owned corporation.

Central Hudson is currently privately owned by Fortis Inc., a Canadian holding company, and serves the Mid-Hudson Valley, including Ulster, Sullivan, and Orange counties, as well as several other counties across New York. The energy provider serves approximately 315,000 electric customers and 90,000 natural gas customers.

For years, lawmakers have reported receiving a large volume of complaints from Central Hudson customers. This past winter, hundreds of customers again reported dramatic spikes in their utility bills. In April, Congressmember Josh Riley launched an investigation into pricing practices by upstate utility companies, encouraging customers of Central Hudson, National Grid, and NYSEG to share their utility service experiences with his office.

“ There really is no way of keeping rates low as long as for-profit business is allowed to be involved in this,” said Assemblymember Shrestha, who represents New York’s 103rd Assembly District.

The bill proposes to create the Hudson Valley Power Authority, a public benefit corporation that would acquire Central Hudson using tax-exempt authority bonds. Central Hudson workers would remain under private-sector status so that workers could maintain their right to strike, according to Shrestha.

Public authorities gained popularity in the early 1930s with the establishment of the New York Power Authority, the state’s first public power authority, which has since become the largest state public power authority in the nation. Since then, California, Texas, and Nebraska have followed suit and built publicly-owned utilities for their cities and towns.

Since introducing the bill, Shrestha said that there has been a “rise in interest in actually understanding how this path could work.”

In February, the Kingston Common Council unanimously passed a resolution in support of the Hudson Valley Power Authority Act. WAMC reported that several residents spoke at the council meeting, including one who described paying an extremely high utility bill a few years ago, even though she was out of town at the time.

“ We have hit this dead end where people no longer have answers for how to keep these rates low,” said Shrestha, explaining that inflation has been fueled by a shortage of affordable housing, supply chain disruptions, and geopolitical wars. “It is a moment where we feel like the conditions are ripe for people to be interested in why [the Hudson Valley Power Authority Act] could be a solution.”

Central Hudson has filed increased plan rates with the Public Service Commission (PSC) of approximately 4.6 percent for electricity and 5.8 percent for gas, which, if approved, would go into effect on July 1, 2025.

Réal Hamilton-Romeo from Central Hudson Gas & Electric said that the Hudson Valley Power Authority Act’s proposal is not the solution to price hikes.

“We firmly believe that municipalization is not the solution. Transitioning to a municipalized authority would incur significant costs, which would inevitably be transferred to the residents of the Mid-Hudson Valley,” wrote Hamilton-Romeo, Central Hudson’s Corporate Communications Director, in an email to Radio Catskill. “In fact, this shift would only worsen the already pressing issue of affordability as it relates to energy costs.”

But Shrestha argued that transitioning from private to public ownership would actually save ratepayers’ costs, suggesting that the acquisition would result in a net savings of $45 million according to preliminary analysis.

Shrestha states that the proposed authority would not be subsidized by taxpayer dollars, as services would be funded by guaranteed bill revenue, and the authority could maintain high bond rates without a profit incentive.

“The only difference is in our case, there’s not gonna be any shareholders,” said Shrestha.

The state bill is currently in committee and has been referred to the Committee on Corporations, Authorities and Commissions.

Assemblymember Shrestha will host an online town hall on April 23 at 7 p.m. on Central Hudson’s latest rate increase request. Find more information on the New York State Department of Public Service’s website on how the public can offer public comment on the proposed changes on April 29 and April 30.

Image: Attendees listen to a presentation about the Hudson Valley Power Authority Act on April 6 in Catskill, N.Y. (Photo Credit: Hudson Valley for Public Power)