Power for the People

The Hudson Valley Power Authority Act (A10332/S9534)

The Hudson Valley Power Authority Act, introduced by Assemblymember Sarahana Shrestha and Senator Michelle Hinchey, creates a new state power authority, the Hudson Valley Power Authority (HVPA), that is authorized to acquire Central Hudson and run it as a publicly-owned and democratic energy utility whose primary goal is to be in the service of its ratepayers by providing low rates, reliable service, correct and easy to understand bills, clean energy, community benefits, strong labor protections, and environmental justice.

Array ( [title] => Sandeep Vaheesan, Legal Director, Open Market Institute [text] =>

“In her carefully crafted Hudson Valley Power Authority Act, Assemblymember Shrestha proposes to replace the underperforming Central Hudson Gas & Electric Corp. with a democratically governed public utility. Under the bill, the people of the Hudson Valley would no longer endure the high rates and poor service of Central Hudson—a utility owned by a Canadian holding company and in relentless pursuit of financial returns. Instead, the community would exercise effective control over its electric and gas supply and put public service first. With this bill and last year’s Build Public Renewables Act, the State of New York is once again at the forefront of the fight for public power.”

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Sandeep Vaheesan, Legal Director, Open Market Institute

“In her carefully crafted Hudson Valley Power Authority Act, Assemblymember Shrestha proposes to replace the underperforming Central Hudson Gas & Electric Corp. with a democratically governed public utility. Under the bill, the people of the Hudson Valley would no longer endure the high rates and poor service of Central Hudson—a utility owned by a Canadian holding company and in relentless pursuit of financial returns. Instead, the community would exercise effective control over its electric and gas supply and put public service first. With this bill and last year’s Build Public Renewables Act, the State of New York is once again at the forefront of the fight for public power.”

Array ( [title] => Why should New York pursue public power? [text] =>

The fight for public power is not new to New York. The state legislature founded the New York Power Authority (NYPA) in 1931 as a counterweight to the power of speculative private utilities like ConEd, owned at the time by J.P. Morgan. At its inception, NYPA lowered rates and protected the state’s public waters from private interests. Since then, the state has deregulated the energy system and separated the supply and delivery sides. Outside of the rural coops and municipally-owned utilities that stepped in to provide service to the otherwise neglected rural areas of New York, delivery of energy is monopolized by investor-owned utilities across the state. At a time when our energy transition to meet our climate goals stands to put the burden primarily on ratepayers, reclaiming energy as a public good with a state power authority will have the following benefits:

  • Lower rates: Publicly-owned utilities provide lower rates to ratepayers on average. As public entities, they can access financing at lower interest rates and prioritize affordability.
  • Reliable Service: Publicly-owned utilities have the highest track record of reliable service as they’re able to prioritize service over profits.
  • Community benefits: With no shareholders to serve, publicly-owned utilities can serve as anchor institutions that invest in community benefits.
  • Effective Coordination: Poor coordination has stalled the buildout of renewable energy. Publicly-owned utilities can coordinate directly with other state entities to streamline the energy system in its territory.
  • Labor Protections: Investor-owned utility workers are pitted against ratepayers. Publicly-owned utilities can invest in workers without always passing costs to its ratepayers.
  • Clean Energy: Public power entities with the public good as their core mission are more effective at leading just transition to renewable energy.
[image] => )

Why should New York pursue public power?

The fight for public power is not new to New York. The state legislature founded the New York Power Authority (NYPA) in 1931 as a counterweight to the power of speculative private utilities like ConEd, owned at the time by J.P. Morgan. At its inception, NYPA lowered rates and protected the state’s public waters from private interests. Since then, the state has deregulated the energy system and separated the supply and delivery sides. Outside of the rural coops and municipally-owned utilities that stepped in to provide service to the otherwise neglected rural areas of New York, delivery of energy is monopolized by investor-owned utilities across the state. At a time when our energy transition to meet our climate goals stands to put the burden primarily on ratepayers, reclaiming energy as a public good with a state power authority will have the following benefits:

  • Lower rates: Publicly-owned utilities provide lower rates to ratepayers on average. As public entities, they can access financing at lower interest rates and prioritize affordability.
  • Reliable Service: Publicly-owned utilities have the highest track record of reliable service as they’re able to prioritize service over profits.
  • Community benefits: With no shareholders to serve, publicly-owned utilities can serve as anchor institutions that invest in community benefits.
  • Effective Coordination: Poor coordination has stalled the buildout of renewable energy. Publicly-owned utilities can coordinate directly with other state entities to streamline the energy system in its territory.
  • Labor Protections: Investor-owned utility workers are pitted against ratepayers. Publicly-owned utilities can invest in workers without always passing costs to its ratepayers.
  • Clean Energy: Public power entities with the public good as their core mission are more effective at leading just transition to renewable energy.
Array ( [title] => Johanna Bozuwa, Executive Director, Climate and Community Project [text] =>

“The Hudson Valley Power Authority (HVPA) is the utility of the future—grounded in affordability, a green transition, and democracy. For far too long private companies have extracted profit from a public service. Creating HVPA is a critical way to put the energy future of the Hudson Valley back into the hands of the people. I strongly believe that the HVPA will be a model for other communities across the country.”

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Johanna Bozuwa, Executive Director, Climate and Community Project

“The Hudson Valley Power Authority (HVPA) is the utility of the future—grounded in affordability, a green transition, and democracy. For far too long private companies have extracted profit from a public service. Creating HVPA is a critical way to put the energy future of the Hudson Valley back into the hands of the people. I strongly believe that the HVPA will be a model for other communities across the country.”

Array ( [title] => What are the main components of the bill? [text] =>

Progressive Green Rates: Customers with high energy use are currently rewarded with discounts. In contrast, HVPA will lower rates for everyone and increase them proportional to use. Ratepayers who adequately conserve energy may not have to pay a utility bill at all.

Price Caps: Household utility bills will be capped at 6 percent of household income.

Participatory Budgeting for Local Communities: HVPA will transfer a portion of its revenue into community-controlled trust funds. A participatory budgeting process that includes local elected officials will determine what community benefit projects the fund can be spent towards.

Protect Smart Meter Data: Ratepayers will have the option to opt out of smart meters, and data will not be shared with private companies, and local, state, or federal law enforcement agencies, including Immigration and Customs Enforcement (ICE).

Access Public Renewables: HVPA will have the authority to build generation assets and access publicly-owned renewable energy from NYPA at locked-in preferential rates.

Clear Goals for a Just Transition: HVPA will have internal mandates to achieve the goals of the Climate Leadership and Community Protection Act:

  • Procure 70% renewable electricity by 2030, and 100% renewable electricity by 2040, provided the supply is available
  • Ensure at least 35% of the benefits of clean energy and energy efficiency programs go to disadvantaged communities in its service territory
  • Conduct a study within two years of its creation to create a timeline for the phaseout of its gas infrastructure

Strong Labor Protections: Worker protections is a core benefit of a publicly-owned utility. The bill will empower workers as follows:

  • Preserve the right to strike is by maintaining current contract and a private-sector status for the workers
  • Maintain the current retirement plan along with the rest of the contract
  • The union’s local will have a seat in the Board of Trustees and two seats on the Observatory’s Governing Board.
  • Prohibit hiring short-term contractors as a way to avoid union rates
  • Creation of new roles will prioritize hiring from the following pools: (1) existing workers whose current roles stand to get eliminated (2) workers who live in disadvantaged communities within the service territory (3) workers who live in the service territory

Require NYPA’s Collaboration to Build Needed Transmission Capacity: the bill mandates NYPA to collaborate with the HVPA around regional planning in order to reduce costs for HVPA ratepayers.

Take Full Advantage of Federal Incentives: HVPA will be tasked to take full advantage of federal grants, such as the new tax credits for home and commercial electric upgrade that are available under the Inflation Reduction Act (IRA).

Public Distributed Renewable Energy (PDRE) Program: HVPA will ensure ratepayers are fairly rewarded for sending energy back to the grid and will plan, fund, and build distributed renewable energy.

Procurement Guidelines: HVPA will prioritize securing contracts with Minority and Women Owned Business Enterprises (MWBE) and unionized workforces. Procurement will be transparent and overseen by the Observatory.

Asset Management: Assets will be held in a public bank as soon as practicable in order to reap the community benefits of public banking.

[image] => )

What are the main components of the bill?

Progressive Green Rates: Customers with high energy use are currently rewarded with discounts. In contrast, HVPA will lower rates for everyone and increase them proportional to use. Ratepayers who adequately conserve energy may not have to pay a utility bill at all.

Price Caps: Household utility bills will be capped at 6 percent of household income.

Participatory Budgeting for Local Communities: HVPA will transfer a portion of its revenue into community-controlled trust funds. A participatory budgeting process that includes local elected officials will determine what community benefit projects the fund can be spent towards.

Protect Smart Meter Data: Ratepayers will have the option to opt out of smart meters, and data will not be shared with private companies, and local, state, or federal law enforcement agencies, including Immigration and Customs Enforcement (ICE).

Access Public Renewables: HVPA will have the authority to build generation assets and access publicly-owned renewable energy from NYPA at locked-in preferential rates.

Clear Goals for a Just Transition: HVPA will have internal mandates to achieve the goals of the Climate Leadership and Community Protection Act:

  • Procure 70% renewable electricity by 2030, and 100% renewable electricity by 2040, provided the supply is available
  • Ensure at least 35% of the benefits of clean energy and energy efficiency programs go to disadvantaged communities in its service territory
  • Conduct a study within two years of its creation to create a timeline for the phaseout of its gas infrastructure

Strong Labor Protections: Worker protections is a core benefit of a publicly-owned utility. The bill will empower workers as follows:

  • Preserve the right to strike is by maintaining current contract and a private-sector status for the workers
  • Maintain the current retirement plan along with the rest of the contract
  • The union’s local will have a seat in the Board of Trustees and two seats on the Observatory’s Governing Board.
  • Prohibit hiring short-term contractors as a way to avoid union rates
  • Creation of new roles will prioritize hiring from the following pools: (1) existing workers whose current roles stand to get eliminated (2) workers who live in disadvantaged communities within the service territory (3) workers who live in the service territory

Require NYPA’s Collaboration to Build Needed Transmission Capacity: the bill mandates NYPA to collaborate with the HVPA around regional planning in order to reduce costs for HVPA ratepayers.

Take Full Advantage of Federal Incentives: HVPA will be tasked to take full advantage of federal grants, such as the new tax credits for home and commercial electric upgrade that are available under the Inflation Reduction Act (IRA).

Public Distributed Renewable Energy (PDRE) Program: HVPA will ensure ratepayers are fairly rewarded for sending energy back to the grid and will plan, fund, and build distributed renewable energy.

Procurement Guidelines: HVPA will prioritize securing contracts with Minority and Women Owned Business Enterprises (MWBE) and unionized workforces. Procurement will be transparent and overseen by the Observatory.

Asset Management: Assets will be held in a public bank as soon as practicable in order to reap the community benefits of public banking.

Array ( [title] => Jen Metzger, Ulster County Executive [text] =>

“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. 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.”

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Jen Metzger, Ulster County Executive

“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. 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.”

Array ( [title] => Why is Central Hudson a good place to start? [text] =>

Central Hudson is the lowest-ranked utility in the state for customer satisfaction. Amid a multi-year billing fiasco that has spanned several years, the company filed to increase its delivery rates by 31% for electricity and 29% for gas. This is unsustainable, and Hudson Valley residents are ready to lead the fight for energy democracy.

[image] => )

Why is Central Hudson a good place to start?

Central Hudson is the lowest-ranked utility in the state for customer satisfaction. Amid a multi-year billing fiasco that has spanned several years, the company filed to increase its delivery rates by 31% for electricity and 29% for gas. This is unsustainable, and Hudson Valley residents are ready to lead the fight for energy democracy.

Array ( [title] => Why is HVPA the solution? [text] =>

The conflict between profit and public interest lies at the root of the multiple crises facing Central Hudson. Creating a democratically-run public authority that can take advantage of tax-free bond financing to purchase the company will reduce costs and increase accountability.

One of the inherent problems with investor-owned utilities is that they make profit by convincing state regulators to approve expensive (and sometimes unnecessary) infrastructure projects that the rest of us have to pay for over time. Unfortunately, this financing model disincentivizes deployment of low-cost climate-friendly initiatives. Creating HVPA would deliver utility justice and ensure we transition our grid at the speed and scale that the climate crisis requires.

[image] => )

Why is HVPA the solution?

The conflict between profit and public interest lies at the root of the multiple crises facing Central Hudson. Creating a democratically-run public authority that can take advantage of tax-free bond financing to purchase the company will reduce costs and increase accountability.

One of the inherent problems with investor-owned utilities is that they make profit by convincing state regulators to approve expensive (and sometimes unnecessary) infrastructure projects that the rest of us have to pay for over time. Unfortunately, this financing model disincentivizes deployment of low-cost climate-friendly initiatives. Creating HVPA would deliver utility justice and ensure we transition our grid at the speed and scale that the climate crisis requires.

Array ( [title] => How will HVPA purchase Central Hudson? [text] =>

HVPA is authorized 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.

[image] => )

How will HVPA purchase Central Hudson?

HVPA is authorized 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.

Array ( [title] => Dan Maloney, UAW 1097 President and Chair of NY UAW CAP [text] =>

“Our New York State United Auto Workers membership supports all efforts to pursue a public takeover of critical infrastructure. We know that by removing the exorbitant profits of the energy supply utilities, rates could be lowered while improving services. We stand in solidarity with all that will help create unionized public utilities that will invest in a green energy transformation here in New York. We support localized public control of our energy supply and distribution system. We can create good paying union jobs while rebuilding our crumbling power grid and, at the same time, save money for ratepayers.”

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Dan Maloney, UAW 1097 President and Chair of NY UAW CAP

“Our New York State United Auto Workers membership supports all efforts to pursue a public takeover of critical infrastructure. We know that by removing the exorbitant profits of the energy supply utilities, rates could be lowered while improving services. We stand in solidarity with all that will help create unionized public utilities that will invest in a green energy transformation here in New York. We support localized public control of our energy supply and distribution system. We can create good paying union jobs while rebuilding our crumbling power grid and, at the same time, save money for ratepayers.”

Array ( [title] => Have there been similar efforts in New York? [text] =>

Yes! In addition to NYPA, the state legislature created the Long Island Power Authority (LIPA) in 1986, but because it took over a failing utility in an area that’s vulnerable to extreme weather events, the authority entered a public-private partnership that undermines most benefits of public ownership—even though it was still able to lower rates immediately. Since then, there has been a campaign to make LIPA fully public, and a taskforce recently recommended true public ownership as the path forward for LIPA, as laid out in the bill A8894.

There are also smaller municipal public power entities across New York with significant track records of success. In Massena, NY, residents voted to municipalize their investor-owned utility in the 70s, and today they pay some of the cheapest prices for some of the cleanest energy in the state. They pay 4 cents per kWh/hr, with all charges included, compared to 15 cents per KWh/hr that their neighbors in National Grid territory pay.

[image] => )

Have there been similar efforts in New York?

Yes! In addition to NYPA, the state legislature created the Long Island Power Authority (LIPA) in 1986, but because it took over a failing utility in an area that’s vulnerable to extreme weather events, the authority entered a public-private partnership that undermines most benefits of public ownership—even though it was still able to lower rates immediately. Since then, there has been a campaign to make LIPA fully public, and a taskforce recently recommended true public ownership as the path forward for LIPA, as laid out in the bill A8894.

There are also smaller municipal public power entities across New York with significant track records of success. In Massena, NY, residents voted to municipalize their investor-owned utility in the 70s, and today they pay some of the cheapest prices for some of the cleanest energy in the state. They pay 4 cents per kWh/hr, with all charges included, compared to 15 cents per KWh/hr that their neighbors in National Grid territory pay.

Array ( [title] => —Dr. Eli Dueker, Director of the Center for the Environmental Sciences and Humanities at Bard College [text] =>

“Bard College’s Center for Environmental Sciences and Humanities stands ready to fully participate in the community science pieces of this legislation. This effort represents a stunningly concrete example of what communities across the nation need to be doing in order to build true resilience as climate change challenges our infrastructures, water, and air quality.”

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—Dr. Eli Dueker, Director of the Center for the Environmental Sciences and Humanities at Bard College

“Bard College’s Center for Environmental Sciences and Humanities stands ready to fully participate in the community science pieces of this legislation. This effort represents a stunningly concrete example of what communities across the nation need to be doing in order to build true resilience as climate change challenges our infrastructures, water, and air quality.”

Array ( [title] => How will HVPA be governed? [text] =>

The Public Service Commission (PSC)’s role will be limited to evaluating HVPA’s progress towards the state’s CLCPA goals, and it will otherwise be governed by a Board of Trustees that is overseen by an Observatory, which is an autonomous civil society organization designed to improve community participation, transparency, and benefit sharing.

The Board of Trustees will have:

  • Two trustees appointed by the Governor
  • Two trustees appointed by the Senate
  • Two trustees appointed by the Assembly
  • The Business Manager of the IBEW Local
  • The Chair of the Observatory’s Governing Board
  • An appointee from the Observatory’s Governing Board, whose expertise fills the gap for one of the relevant sectors outlined below.

Observatories are successfully functioning around the world to help communities ensure that public utilities achieve their grid, climate, and community goals. Its Governing Board will include seven Appointed Members and:

  • Elected county representatives, one each from Ulster, Dutchess, and Green, and one combined representative from the outlying counties, Albany, Columbia, Orange, Putnam, and Sullivan
  • 2 labor members representatives chosen by the IBEW local
  • 2 members from one or more academic institutions that are partners to the Observatory
[image] => )

How will HVPA be governed?

The Public Service Commission (PSC)’s role will be limited to evaluating HVPA’s progress towards the state’s CLCPA goals, and it will otherwise be governed by a Board of Trustees that is overseen by an Observatory, which is an autonomous civil society organization designed to improve community participation, transparency, and benefit sharing.

The Board of Trustees will have:

  • Two trustees appointed by the Governor
  • Two trustees appointed by the Senate
  • Two trustees appointed by the Assembly
  • The Business Manager of the IBEW Local
  • The Chair of the Observatory’s Governing Board
  • An appointee from the Observatory’s Governing Board, whose expertise fills the gap for one of the relevant sectors outlined below.

Observatories are successfully functioning around the world to help communities ensure that public utilities achieve their grid, climate, and community goals. Its Governing Board will include seven Appointed Members and:

  • Elected county representatives, one each from Ulster, Dutchess, and Green, and one combined representative from the outlying counties, Albany, Columbia, Orange, Putnam, and Sullivan
  • 2 labor members representatives chosen by the IBEW local
  • 2 members from one or more academic institutions that are partners to the Observatory