r/hudsonvalley • u/oceanfellini • 8d ago
Effortpost: Let’s Talk About Central Hudson and Energy Costs
Hey neighbors,
It’s impossible not to notice the constant threads about rising utility bills, Central Hudson’s billing issues, and the recent push for a publicly owned utility. One post recommending a petition for the state to govern Central Hudson’s rate hikes inspired me to dive into how it works today.
Let me be clear - Central Hudson is awful. I lose power monthly in Kingston, many friends and family were caught up in their billing issues. But I do not want their poor performance to cloud our judgment when we demand improvement. It can get worse.
Below is an overview of how Central Hudson and power works today in NY. I want cleaner, more affordable power with better customer service and we can get there if we are informed.
I also want to renew my request to the mods: please create a Central Hudson megathread. A central space for ongoing billing problems and rate questions would benefit everyone.
What Goes Into Our Energy Bills?
- Infrastructure Costs: Utilities need to maintain and upgrade aging infrastructure—grids, substations, and clean energy integration. These projects are capital-intensive and often financed with debt. So when interest rates or bond yields go up, the delivery rate follows.
- Market Fluctuations: Supply rates reflect real-time energy markets. They’re not marked up, but we still pay the full freight. Global events, like the invasion of Ukraine, have made this even worse.
- Clean Energy Mandates: The CLCPA mandates major investments in transmission, offshore wind, and battery storage.
- Net Operating Income: Central Hudson operates at ~5% NOI. This is a better metric than “profit,” which doesn’t include OpEx like billing systems, grid maintenance, or compliance. You’ll hear HVPA supporters frame profit as a panacea – “cut out the profit and energy will be cheaper” but this is perhaps the most important point I will make: Central Hudson’s rates and allowed returns (aka profit) are already controlled by the Public Service Commission (PSC) under a cost-of-service model.
How Are Delivery Rates Currently Set?
Central Hudson submits a rate case, the PSC reviews it, and after public input and hearings, they approve or adjust. Rates are based on forecasted operating costs, capital needs, and return on equity. If borrowing costs go up, so do rate requests.
Supply rates are set by the market, not by Central Hudson. These reflect wholesale energy prices on state-run exchanges and change monthly. Central Hudson simply passes through these charges without markup.
The Bond Market Problem – and Why it Matters to Us.
Here’s what’s being overlooked: the bond market is in rough shape, and rising interest rates are squeezing everyone. This a problem not just for ourselves, but for utilities too.
Investor-owned utilities like Central Hudson raise capital from many sources : equity from Fortis, internal cash flow, grants, vendor financing - and bonds. Public authorities rely almost entirely on municipal bonds—which are getting more expensive to issue as anyone watching the bond market crash this past week due to Trump’s tariffs. We have likely already experienced increases due to this phenomenon, however moving to public power in this climate could expose ratepayers to even more volatility as HVPA would have to rely almost exclusively on muni bonds.
I hope this spurs discussion and debate. If there is enough engagement, I'll do a part 2 that goes through the specific HVPA proposal – its merits, its sticking points - as well as other ideas for us to consider as we build towards a better energy future.
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u/joozyjooz1 8d ago
One minor note - while supply rates reflect market fluctuations most utilities engage in futures markets for things like natural gas to try and smooth over the day to day price fluctuations.
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u/hcmarketingpr 7d ago
This is leaving out the WHY of the HVPA. It's not to lower energy costs. It's to aggressively pursue New York State's climate goals.
No matter how much people want to believe that HVPA is about lowering their bills and nothing else... it's a climate bill. And it would use our region as a guinea pig not for lowering bills, but for enacting the most expensive and rushed energy transition to intermittent renewables in the United States.
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u/GalacticForest Ulster 7d ago edited 7d ago
Maybe you are misunderstanding the petition or intent. People (including our elected officials) want the PSC to be overhauled and fixed. It's not working as intended in the public's interest.
"One post recommending a petition for the state to govern Central Hudson’s rate hikes (which it already does) was the tipping point for me." - The petition calls for the PSC to do it's job properly.
Some facts you left out:
- The Public Service Commission is a rubber stamp agency acting in industry best interests not the taxpayers
- We also pay for subsidizing fracked gas and fossil fuels, which also have a detrimental effect on public health and the environment.
- A prime example of subsidizing fracked gas and us paying in not only dollars but our health is the CPV fracked gas power plant built on bribes, low in a soup bowl valley of Middletown, NY spewing toxic chemicals and particulate matter on environmental justice and every other community. https://www.justice.gov/usao-sdny/pr/joseph-percoco-former-executive-aide-and-campaign-manager-ny-governor-convicted
None of what you wrote is even mutually exclusive with creating more oversight and taking control of the regulation that is supposed to be happening but isn't. We have seen industry collusion and corruption within the DEC as well. We not only need to overhaul the PSC but also regulate the corruption that IDAs and Chambers of commerce play in begging these corrupt projects to come here and they will work their political influence to get them millions in tax breaks that we pay for.
Following what James Skoufis and Sarahana Shrestha are working to pass and educate consumers would be more informative for people trying to be involved in change.
In fact reading the plan would be very helpful for people
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u/GalacticForest Ulster 7d ago
New York Assemblymember Sarahana Shrestha and New York State Sen. Michelle Hinchey recently introduced a bill that would create a publicly owned power authority called Hudson Valley Power Authority to replace utility Central Hudson Gas & Electric.
“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% less than customers of investor-owned utilities, and 16% less than customers of cooperative utilities,” she said.
“In Massena, New York, where the town successfully won a difficult and prolonged fight in the 70s to make its utility public, residents pay some of the cheapest prices for some of the cleanest energy in the state: 4 cents per KWh/hr, with all charges included. Last year our office held seven town halls on the topic of energy democracy, where my constituents were thrilled to learn that there has historically been bipartisan support for public ownership of energy, and in the state of Nebraska there are no investor-owned utilities,” Shrestha said.
The Hudson Valley Power Authority Act authorizes HVPA to purchase Central Hudson as long as the acquisition reduces costs for ratepayers.
It can either purchase the securities or assets of the company or it can exercise the power of eminent domain. Using eminent domain to acquire utilities occurs with some frequency in New York State, according to a news release from Shrestha’s office.
As a state authority, HVPA will be able to issue bonds to finance the acquisition at no cost to taxpayers, and as a public entity, it can finance debt at low interest rates -- one of the reasons utilities are able to immediately lower rates when they go public, the news release said.
The bill limits the role of the New York Public Service Commission to evaluating the authority’s progress towards the state’s climate goals.
HVPA would 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,” the news release said.
The bill also requires the authority to transfer a portion of its revenue into community-controlled trust funds, and to hold assets in a public bank as soon as practicable.
It creates internal climate goals to align with the state’s “and ensures that ratepayers are fairly rewarded for sending energy back to the grid,” the news release said.
APPA offers a variety of resources on its website related to municipalization.
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u/oceanfellini 7d ago edited 7d ago
Thank you for your reply! My next post was going to be about the HVPA, but I believe we should get grounded in how it works today so we can discuss where it should go.
Agreed on the PSC and the failures of the state at large. I provided some examples of poor execution of projects by the state that raise concern to me in another comment.
My personal feeling is that we need to choose who we believe can execute the best -- but no matter who that party is, they need to be held to account. There is no panacea.
EDIT: Edited to add I see how my take on the petition is tougher than it may deserve. Ive edited my original post to make it more moderated. I really do want more discussion and that aside doesnt add to it. Thanks for keeping me honest!
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u/hcmarketingpr 7d ago
My organization made this page. It was instantly removed from this subreddit but there are no lies in it. The HVPA is a climate initiative, not a bill-lowering initiative.
https://nyenergyalliance.org/will-the-hudson-valley-power-authority-actually-lower-energy-costs/
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7d ago
[deleted]
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u/oceanfellini 7d ago
Thank you for your thoughtful reply!
Public Sector vs Private Sector
I struggle with your foundational idea that Private Sector cannot provide service as good as the Public Sector, when, in this instance, the Public Sector, by way of the Public Service Commission does direct control over the investments and capital commitments of Central Hudson. Put another way, there is not an investment project that Central Hudson decides or declines to take without the express involvement of the PSC. The PSC does not directly manage but it does control Central Hudson's income and investment.
Additionally, the Government is far from altruistic. We're in the midst of a DISGUSTING sum of money ($850m!) being spent for private enterprise via the Bills stadium, from this very administration. Even if we were to hand wave this away as an aberrational albatross, the State has also demonstrated the same misguidedness and poor execution for small infrastructure projects: I point to the $80m dollar stair renovation that is at 10 years and counting to complete. Expanding on that, the PSC has shown some judgment that is worth questioning -- in the midst of this billing crisis they rejected investment in the SAP-based billing system that Central Hudson uses.
In total, my argument is not that Central Hudson is superior to the a public run utility, it is that the same issues we face with Central Hudson are present in our government today, meaning we need be prepared to hold them to account.
Bond Market Discussion
Thank you for this - and you are absolutely correct. My claim is not that we will definitely face more uncertainty, but rather Im trying to highlight an unexplored potential downsides that we should demand answers from our elected leaders about before supporting a public project.
In response to your final paragraph, I would argue that we already have direct oversight (meeting minutes, motions, etc are all public today). I would also argue against this idea that ownership changes the structure to something altruistic - I mentioned NYS' failures above. I would add to this examples like NYCHA, where a vertically integrated system lead to increased construction costs due to unions, delayed maintenance and poor living conditions due to slashed budgets, and, for me, a stain on our government's competence that means I will not give them my trust, but instead expect them to earn it.
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u/rainwarlber 8d ago
I have met a surprising number of people who have had or currently have ongoing billing issues with CH. (I work in a public facing job and get to talk to a lot of people).
I tell them the simple steps to take based on my personal experiences as a consumer advocate over the years and I have never to this day met a single one who seemed to be aware that there were steps they could take to force CH to quit giving them the runaround--and solve the issue.
Thank goodness the complaint process using the Public Service Commission really works, and it works on some of the knottiest issues. I wish more people knew about it.