Kingston’s representatives in state government are introducing legislation that, if it becomes law, would replace Central Hudson Gas & Electric Co. with what Assemblymember Sarahana Shrestha (D-Esopus) and state Sen. Michelle Hinchey (D-Saugerties) call “a publicly owned and democratically controlled power authority.”

The Hudson Valley Power Act would create he Hudson Valley Power Authority and authorize it to buy Central Hudson, either by buying its stock or by eminent domain, “as long as the acquisition reduces costs for ratepayers.” The authority will finance the cost by issuing bonds, which takes taxpayers off the hook.

“ … [As] a public entity, [the new authority] can finance debt at low interest rates — one of the reasons utilities are able to immediately lower rates when they go public,” the lawmakers stated in a press release Thursday.

The legislation would also remove the Hudson Valley Power Authority from the purview of the state Public Service Commission, limiting the oversight board, which is currently considering Central Hudson’s rate increase request, to “evaluating the authority’s progress towards the state’s climate goals.”

The authority, the lawmakers stated, “will be governed by a board of trustees that is overseen by an observatory, which is an increasingly common form of autonomous civil society organization designed to improve community participation, transparency and benefit-sharing.” Also envisioned is, they stated, a “progressive green rate structure where the less energy people use, the less they will pay per kWh, and ratepayers who conserve enough energy may not even have to pay a utility bill at all.”

“Publicly owned utilities have the best track record in service reliability, compared to cooperatives and investor-owned utilities in the country,” said Shrestha. “Residential customers of publicly owned utilities pay monthly bills that are on average 4 percent less than customers of investor-owned utilities, and 16 percent less than customers of cooperative utilities.”

“Utility companies provide an essential service, and yet the current utility model prioritizes profits over people. It's time to reclaim energy as a public good,” Hinchey stated. “This legislation, in collaboration with Assemblymember Shrestha, will, for the first time in our region, create a truly publicly owned utility through the Hudson Valley Power Authority. This model is guaranteed to have the backs of consumers and prioritize the transparent, dependable, and affordable service our residents deserve.”

Central Hudson’s director of media relations, Joe Jenkins, said Thursday the utility doesn’t think a government takeover is that good of an idea. “For over 120 years, Central Hudson has powered the Hudson Valley with a focus on safety, reliability, and affordability,” Jenkins stated. “As New York undergoes a transformative period in its energy landscape, we strongly believe that municipalization is not a solution. Any debates about the merit of municipalization has to be based on a thorough assessment of the facts.

“Central Hudson infuses significant resources into our communities, including more than $60 million annually through property taxes paid — money that is used to help fund police and fire departments and school districts, Jenkins stated. “The utility also provides financial support for local not-for-profit community service organizations, economic development grants and local business support through the local chambers of commerce.

“The electric and natural gas system was financed by private investors and borrowed capital. A change in ownership would carry a substantial cost that would ultimately fall on residents in our communities. … We look forward to reviewing the bill in its entirety.”

Central Hudson provides electric and natural gas services to more than 400,000 customers in a service area that stretches from the northern suburbs of New York City to the Capital District. The utility has been under scrutiny by the Public Service Commission since September 2021, when the company rolled out a new automated billing system that turned out to be plagued with critical errors. Over the next year, customers reported not receiving any bills at all for months, then being hit with astronomical bills all at once. In other cases, customers enrolled in the company’s auto-pay program saw their bank accounts drained by erroneous charges. Customers also reported wild and unexplained fluctuations in their monthly bills. The PSC said that Central Hudson’s practice of reading meters every other month, then estimating usage in the intervening months, also led to numerous instances of overbilling.

An investigation by the state Department of Public Service, the administrative arm of the PSC, revealed that top Central Hudson executives knew that the billing system was riddled with bugs before they activated it, then misled customers about the nature of the causes of inexplicable cost increases. The company’s CEO has since been replaced and the utility is the subject of multiple class action lawsuits. Separate ongoing investigations are probing the general operation of the utility and its response to a February 2022 ice storm that left thousands of county residents without power in sub-zero temperatures.

“When I directed Citizens for Local Power, we strenuously fought the takeover of Central Hudson by Fortis more than a decade ago, and all of our concerns at the time have been validated many times over,” Ulster County Executive Jen Metzger stated. “The company puts its shareholders first and our residents and small businesses last, and has proven to be a major obstacle rather than an innovator when it comes to addressing the climate crisis and adopting clean energy solutions. I applaud the efforts of Assemblymember Shrestha for exploring public alternatives to a private monopoly that has fallen seriously short of serving the public interest.”

"This bill comes at a pivotal moment where investor-owned utility monopolies are failing our communities en masse,” stated Communities for Local Power Executive Director Jess Mullen. “As we've seen with the lack of accountability for Central Hudson's numerous failings over the past several years, our Public Service Commission does not protect ratepayers. It's clear we need an alternative to the status quo.”

A press conference and rally to tout the legislation is scheduled for noon on Friday, May 24 at 324 Washington Ave., Kingston. Shrestha will host an online town hall on May 30 to present the details of the bill. RSVP is required: bit.ly/ch-public-power

With additional reporting by Jesse J. Smith