Con Ed, Raise Standards Before Raising Rates

Hearings have been convened to discuss a proposed rate increase by Con Edison, a prospect I find somewhat unsettling after their startling track record of irresponsibility and deception over the past two decades. I hope these public discussions will serve as a forum of truth to combat the oftenmisleading facts, figures and statements released by Con Ed.

Although New Yorkers already pay some of the highest rates in the country, Con Edison believes it needs to charge ratepayers another $1.225 billion a year, a hike that will translate into 17 percent for residents and 10 percent for businesses. Even if a portion of these funds is directed toward infrastructure improvement, as Con Ed claims, more than $300 million is earmarked for stock dividends. Ratepayers should not be directly penalized to swell the pockets of investors. The state Public Service Commission (PSC) and other officials, including myself, have rightly criticized other expenditures cited by Con Ed, resulting in a recommendation to roughly slash Con Ed's increase request in half. If this company truly wants to increase revenue, I suggest it first look to the multi-million dollar compensation packages- including $14.1 million in stock options- enjoyed by many of its executives.

It seems that there is no end to Con Ed's arrogance. This company needs to be heavily fined and held accountable for its past negligence, not burden the people of New York with more fees to pay for problems of their own making. Some businesses in Northwest Queens did not recover from the damages that Con Ed caused them, including several stores that folded just down the street from my office. Despite claiming an intention to work with businesses, Con Ed adamantly stuck to its outdated and ridiculous policy of reimbursing residents a maximum of $300 and businesses $7,000. These figures were designed for losses in a typical blackout lasting a few hours, not the nine days of torture that my constituents endured in the sweltering heat of July 2006. Now Con Ed has the unmitigated gall to demand more money from those same ratepayers. The only thing more arrogant than this would be to open a Con Ed bill-collector center in the former storefront of the Cold Stone Creamery that shut down because of the blackout.

Con Ed has repeatedly argued that its service is as reliable or more so than other utility providers around the country, as reported in statistics given to the PSC. The only problem with their argument, however, is that Con Ed is the party responsible for compiling those very statistics. Since the PSC links rate increases and penalties to reliability rates, Con Ed has every incentive to massage their numbers, blaming poor service on anything that will divert fault from themselves. In fact, we learned beyond a shadow of a doubt during the blackout two summers ago that Con Ed distorts its service numbers. The company first reported that only 400 customers were affected, though it was likely 500 times that number. If the blackout had not continued for nine days, and local leaders had not alerted the press, Con Ed certainly would have reported that initial figure to the PSC and got away with it. This system is the fox guarding the hen house in the purest meaning of the phrase, and the plain facts tell a much different story.

Why are we rewarding a company that has allowed the city to become an obstacle course of stray voltage, exploding manholes, steam pipe explosions and service interruptions? This summer, power went out at various times in Manhattan, The Bronx and Staten Island, many times with little or insufficient explanation. We also recently learned that a faulty contracting job was responsible for the midtown steam explosion that killed one person and left another severely injured. To this day, not one person at Con Ed has been held accountable for this gross negligence.

Con Ed is an arrogant monopoly that needs more oversight, not more pampering. The decision to raise rates will have a profound impact on the lives of New York City residents, and I hope these public hearings will give the people of New York a fair opportunity to express their frustrations and concerns with this monopoly. The company should be forced to raise its standards more than it raises public indignation before it is allowed to raise its rates.

City Councilmember Peter Vallone Jr. represents the 22nd Councilmanic District in Astoria and Long Island City.