New York

ConEd: System “Reliable.” Will Continue To Seek Rate Hike

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Remember last week when Governor Andrew Cuomo ripped utility CEOs — including the top-dog at ConEd — a new one for their lack of preparedness for Hurricane Sandy? And how this week thousands of people in New York City are currently without power — because of ConEd’s alleged lack of preparedness?

Well, despite all that, ConEd wants to raise your rates.

In September — prior to last week’s hurricane — the power giant announced plans to raise rates. Public outrage be damned, the company still plans to raise rates.

“We’ve been investing in our system and part of the reason in general,
excluding such a major storm as this, is the system is very reliable.
We’re going to continue to make those investments and we’re going to
continue to, as appropriate, apply for increases,” ConEd CEO Kevin Burke told WCBS.

Burke
says he’s “very sorry about what happened,” but the company plans to go
ahead with a petition to the Public Service Commission to raise rates.

Last week, Cuomo sent utility CEOs a letter stating the following: “If you
failed to prepare, however, as evidenced by your response, it is a
failure to keep your part of the bargain – a failure to keep the trust
that New Yorkers have placed in you by granting you the privilege to
conduct utility business in New York State; in particular, the
certificates of public convenience and necessity (“Certificate”) granted
by the State under the Public Service Law. New Yorkers should not
suffer because electric utilities did not reasonably prepare for this
eventuality. In the context of the ongoing emergency, such a failure
constitutes a breach of the public trust.”

The governor went on to say “Under such
circumstances, I would direct the Public Service Commission to commence a
proceeding to revoke your Certificates.”

For now, those certificates are still in place — and ConEd wants to raise rates as roughly 288,000 people are still without power across New York. For those folks, ConEd wants to raise rates on electricity they currently don’t have — and haven’t had for over a week.

See Cuomo’s entire letter below:

November 1, 2012

Mr. Kevin Burke, Chief Executive Officer

Consolidated Edison Co. of New York, Inc.

4 Irving Place

New York, NY 10003-3598

Mr. William Longhi, President & Chief Executive Officer

Orange and Rockland Utilities, Inc.

One Blue Hill Plaza

Pearl River, NY 10965

Mr. James Laurito, President & Chief Executive Officer

Central Hudson Gas & Electric Corp.

284 South Avenue

Poughkeepsie, NY 12601

Mr. Mark S. Lynch, President

Rochester Gas & Electric Corp. & New York State Electric & Gas Corp.

89 East Avenue

Rochester, NY 14649

Mr. Ken Daly, Chief Operating Officer

National Grid – NY

One Metro Tech Center

Brooklyn, NY 11201

Mr. Thomas B. King, President

National Grid, USA

201 Jones Road – 5th Fl.

Waltham, MA 02451-1120

Mr. Michael Hervey, Chief Operating Officer

Long Island Power Authority

333 Earle Ovington Blvd., Suite 403

Uniondale, NY 11553

Dear Gentlemen:

In the aftermath of Hurricane Sandy, New Yorkers
are faced with responding to its continued harsh impacts on literally
every facet of life. I recognize there are men and women in the field
now working hard to restore service, and we are grateful for their
efforts. But it is your job to provide them with adequate resources and
support to get the job done in a timely and safe manner. Utilities, like
elected officials, are vested with the public’s trust. In the case of
utilities, in exchange for conducting business and generating profits
for their shareholders, they are entrusted to provide safe and adequate
utility service. When they fail to keep the public’s trust, they must
answer.

Because we had several days’ notice of an event of
catastrophic proportions, State and local government and New Yorkers
prepared for an impending storm. Indeed, the public depended on
utilities to prepare for such an event, respond to emergencies and to
return, as quickly as possible, to providing safe and adequate
electricity. The response of your companies to this emergency will be,
in great part, a function of how well you prepared for it and a
testament to how seriously you view this responsibility.

If you
failed to prepare, however, as evidenced by your response, it is a
failure to keep your part of the bargain – a failure to keep the trust
that New Yorkers have placed in you by granting you the privilege to
conduct utility business in New York State; in particular, the
certificates of public convenience and necessity (“Certificate”) granted
by the State under the Public Service Law. New Yorkers should not
suffer because electric utilities did not reasonably prepare for this
eventuality. In the context of the ongoing emergency, such a failure
constitutes a breach of the public trust.

Under such
circumstances, I would direct the Public Service Commission to commence a
proceeding to revoke your Certificates. With respect to the Long Island
Power Authority, I will make every change necessary to ensure it lives
up to its public responsibility. It goes without saying that such
failures would warrant the removal of the management responsible for
such colossal misjudgments.

Sincerely,

ANDREW M. CUOMO

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