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Higgins Tells PSC to Deny NYSEG’s Proposed Rate Hike

Congressman Says Increase is Unjustified and

Yesterday, Congressman Brian Higgins
(NY-27) sent a letter asking the New York State Public Service Commission (PSC)
to reject the proposal by New York State Electric and Gas (NYSEG) to increase
rates for electricity and gas delivery by 18.6% and 17.4% respectively.

“The audacity of NYSEG to hike rates
to struggling consumers while their average energy transmission costs last year
decreased is offensive and egregious,” said Congressman Higgins. “The increase
is even more incredible when you consider the significant new resources made
available to utilities this year through the Recovery Act.”

In his letter, Congressman Higgins
identifies declining average energy transmisson cost numbers for utilities over
the last year as cited by the Bureau of Labor Statistics in the “Producer Price
Index for Electric Bulk Power Transmission and Control”  and “Producer
Price Index for Natural Gas Distribution.”

“This is an unfair and baseless
increase and we are prepared to stand up with local utility consumers and fight
it,” Higgins added. Below is a copy of Congressman Higgins’
letter of September 19:


Hon. Garry A. Brown, Chairman

New York State Public Service

Empire State Plaza

Agency Building 3

Albany, NY 12223-13058

Via fax: 518-486-6081

Re: NYSEG’s proposed increase in
electric and natural gas transmission rates


Dear Chairman Brown:

I read with great interest the Buffalo
News’ report that New York State Electric and Gas (NYSEG) has requested
permission from the Public Service Commission (PSC) for a 18.6% increase in the
rate it can charge for the delivery of electricity and a 17.4% increase in the
rate it can charge for delivery of natural gas.

I  write today to adamantly
protest these proposed increases on the grounds that federal government data
shows that costs associated with natural gas and electrical transmission have
actually fallen substantially over the past year, and on the grounds that the
federal government is presently instituting a 20% subsidy program for upgrades
to electric transmission facilities which will reduce costs for NYSEG and
similarly situated utilities.

Proposed Electric Transmission Rate Hike

The Bureau of Labor Statistics measures
changes in the costs of doing business for various industries throughout the
economy. The “Producer Price Index for Electric Bulk Power Transmission and
Control” fell from 114.6 in July, 2008 to 112.5 in July, 2009. This means that
the costs to utilities engaged in electrical distribution actually fell 1.8%
over the past year. In the face of this deflation, the request for 18.6%
increase in transmission charges for consumers is wholly unjustifiable.

Furthermore, the American Recovery and
Reinvestment Act provided $4.5 billion for the Enhancement of Electricity
Delivery and Energy Reliability. As part of this funding, it provided $3.375
billion for the Smart Grid Matching Grant Program which was authorized in the
Energy Independence and Security Act of 2007. This program provides a 20%
subsidy to utilities engaged in electrical transmission for costs associated
with upgrading and improving the efficiency of their facilities. In an
environment in which NYSEG and similarly situated entities are eligible for
generous federal subsidies to reduce their costs, the proposed 18.6%
transmission rate hike is not acceptable.

Proposed Natural Gas Transmission Rate Hike

The proposed increase in transmission
charges associated with natural gas is even more outrageous than the proposed
increase in electric transmission charges, given that the deflation in the
costs associated with natural gas transmission is so much more pronounced. In
July, 2008, the “Producer Price Index for Natural Gas Distribution” stood at
167.5. By July, 2009 it had fallen to 115.3. That constitutes 31.2% in
deflation. In this sharply deflationary context, NYSEG’s request for a 17.4% is
wholly unjustifiable.

Thank you very much for your
consideration. Again, based on federal government data showing deflation in the
costs associated with electric and natural gas transmission and distribution,
and given the new federal subsidies for this industry, I ask that you deny
NYSEG’s request for transmission rate hikes.



Brian Higgins

Member of Congress



Written by Buffalo Rising

Buffalo Rising

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