AARP: Devil's in Details of Con Ed Rate Deal

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Jan 02, 2014, 04:29 ET

Rate Hikes Loom Under Proposed Settlement; AARP Says Deal Shows Need for Strong, Independent Consumer Advocate to Protect New Yorkers.

NEW YORK, Jan. 2, 2014 /PRNewswire-USNewswire/ -- AARP is issuing a warning to residential utility consumers in New York City and Westchester County: the tentative agreement to "freeze" Con Edison's residential rates over the next few years comes with a built-in rate increase.

The agreement, which state regulators must still approve, does seem to have staved off the massive, $400 million rate hike Consolidated Edison proposed last year, and includes a slightly deeper discount for qualifying low-income consumers.

But AARP says the proposal also contains a bit of smoke and mirrors, since market fluctuations in gas and electricity prices could lead to higher customer bills during the supposed "freeze" period – and since the agreement guarantees rate increases afterward.

With 58% of New York City's 50+ population and 52% of Baby Boomers concerned about being able to afford Con Ed's current rates, which are already more than twice the national average and among the nation's highest, the Association is calling for a residential rate decrease – as the proposed deal provides for commercial and industrial customers.

"New Yorkers are worried about paying their current Con Ed bills; it's a disservice to tell consumers there's no rate increase, when there's one built right into the proposed deal," said Beth Finkel, State Director for AARP in New York State. "As always, the devil is in the details, and there are plenty of devils in this one. It doesn't do much to help New Yorkers' kitchen table economics; there's simply no relief from current rates, which are already sky-high."

The proposal would automatically increase bills by $47.7 million for electric customers after two years and $40.8 million for gas customers after three years.

High utility rates are particularly burdensome on older New Yorkers, who must spend a higher proportion of their household income on energy - especially New Yorkers on fixed incomes.

About 80,000 Con Ed customers are shut off each year for bill collection purposes, and hundreds of thousands are threatened with shutoff every month.

"We are disappointed that this is being touted as a rate freeze, when it is not. Residential consumers, who weren't at the table, won't see the same benefit as commercial and industrial customers," said Finkel. "Residential consumers need a stronger voice in New York; they need someone speaking for them in rate cases and other complex regulatory matters."

AARP is urging Governor Andrew Cuomo to heed the recommendation of his own Moreland Commission for Utility Storm Preparation and Response by establishing an independent consumer utility advocate office to represent New York's residential consumers in rate cases. Forty other states have such offices, which save residential ratepayers far more than they cost.

The New York State Senate's Independent Democratic Conference has made creation of a Utility Consumer Advocate Office a 2014 priority, and AARP is urging the Governor and other state leaders to join in this effort.

AARP is a nonprofit, nonpartisan organization, with a membership of more than 37 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as healthcare, employment and income security, retirement planning, affordable utilities and protection from financial abuse. We advocate for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name as well as help our members obtain discounts on a wide range of products, travel, and services. A trusted source for lifestyle tips, news and educational information, AARP produces AARP The Magazine, the world's largest circulation magazine; AARP Bulletin; www.aarp.org; AARP TV & Radio; AARP Books; and AARP en Espanol, a Spanish-language website addressing the interests and needs of Hispanics. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. AARP Foundation is an affiliated charity of AARP that is working to win back opportunity for struggling Americans 50+ by being a force for change on the most serious issues they face today: housing, hunger, income and isolation. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Learn more at www.aarp.org.

SOURCE AARP New York