Lawsuit planned against reluctant energy supplier
Joining fellow city council, administrators for the Village of New Paltz have agreed to add the village as a plaintiff in a lawsuit against Columbia Utilities, after that company’s executives signaled their desire to pull out of a deal. to supply renewable electricity at a fixed rate. two years earlier than expected. If the cancellation goes through, New Paltz ratepayers would be among the roughly 25,000 area residents who would suddenly be subject to the variable rate hike.
Created under the Cuomo administration, “community choice aggregation” is a salad of words that describes the authority of large numbers of people to negotiate better electricity deals. While the driving force behind this program was to reduce carbon emissions, a secondary benefit is that these flat-rate offers can be cheaper than the variable rate paid for electricity purchased on the open market. To bolster benefits, CCAs are opt-out for affected residents; ratepyers receive many letters explaining the withdrawal process when adopted in a community, and each time a new contract is approved. Leaders of New Paltz, Saugerties and several other communities joined a consortium called Hudson Valley Community Power and selected Joule Assets, Inc. as administrator. The administrator’s role includes negotiating contracts with vendors, as well as sending out all those educational letters.
When a new contract was made with Columbia Utilities, the price of electricity through the CCA had been slightly higher than the variable rate due to a drop in prices during the first months of the pandemic. Since then, ratepayers who chose not to opt out — or who were unaware there was a choice — have enjoyed a flat rate just above six cents per kilowatt hour, while their neighbors paying variable rates suffered from rising bills.
The situation was complicated by the adoption of a new billing system at Central Hudson, which for many users resulted in a high number of estimated reads at a time when rates were changing dramatically. Columbia Utilities executives say the billing shake-up has affected them, too, and it’s serious enough that they have the right to cancel their contract under the ‘force majeure’ clause, which is legally speaking for a much more difficult situation. than expected for reasons that no one could have foreseen. While the filing with the Public Service Commission has been “heavily redacted” according to reports, local leaders and Joule representatives point to the money that could be made for Columbia if it becomes possible to offload the contracts to term on energy at current rates. These contracts, for the purchase of a certain quantity of electricity on a specific date for a particular tariff, are used to plan to become the supplier of choice for all these CCA participants.
Columbia Utilities has been fined at least twice for deceptive marketing practices, and published reports indicate that at least in Saugerties this was raised as a concern during the review of the current contract. In the most recent case, Attorney General Letitia James fined the company $500,000 last March for resuming banned door-to-door marketing after being fined $200,000. for similar activities. In both cases, customers were lured by low rates and found their bills to rise dramatically a month or two later.
This particular case against Columbia Utilities will be headlined and paid for by Joule, but the list of plaintiffs could potentially include all ten municipalities, as well as some individual leaders. Councils for the town and village of New Paltz have agreed to these municipalities becoming plaintiffs, and Mayor Tim Rogers will also be listed individually.
Letters protesting this decision were also sent to the Attorney General and the Public Service Commission by the executives of New Paltz and Saugerties, and possibly others.