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Frequently Asked Questions
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Who will pay to buy Central Hudson?
As a public benefit state corporation, the Hudson Valley Power Authority will issue authority bonds to finance the upfront costs of acquiring Central Hudson, including legal costs. After acquisition, it will be authorized to issue tax-exempt authority bonds to run the publicly-owned utility. Revenue from bills people will pay is used to pay back the debt. Central Hudson currently funds 52% of its finances by issuing debt but its cost of operation is higher because, unlike HVPA, it pays high interest rates and its bonds are not tax-exempt. That means the cost of operation for HVPA would be lower, with the savings passed to the ratepayers.
HVPA is not funded with taxpayer subsidies. Authority bonds are not like municipal bonds that need voter approval, and the state or the taxpayers are not liable for HVPA’s debt obligations.
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Will HVPA be better for Central Hudson workers?
Yes. Currently, everything the Central Hudson workers need, from wages to equipment, has to go through highly politicized rate cases that pit workers against ratepayers. With no shareholders to answer to, HVPA can prioritize alleviating this tension by investing in the needs of the workers while keeping rates as low as possible. To ensure this happens, the bill puts the Business Representative of the Central Hudson union on the Board of Trustees, and the union gets to appoint two people in the Governing Board of the community oversight body, known as the Observatory. Presently, the workers don’t have a representation on Central Hudson’s board.
Additionally, the hiring of short-term contractors to avoid union rates will be prohibited. And HVPA requires the strong labor standards for businesses it contracts with, and for any buildout of generation assets it may pursue.
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Why pursue Public Power?
The fight for public ownership of energy is not new to New York or the United States. In 1931, the state legislature created the New York Power Authority (NYPA) as a counterweight to private utilities like ConEd. And without the federal government stepping in to create publicly-owned or cooperative utilities, most of rural America may still be without power. Today, cities like Los Angeles and Austin get their energy from publicly-owned utilities.
The conflict between profit and public interest has always lied at the root of the multiple crises facing for-profit utilities, and Central Hudson is no exception.
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What will the bill cost taxpayers?
Nothing. As a norm, publicly-owned energy utilities are not subsidized by taxpayers, and neither will the Hudson Valley Power Authority. This is in contrast to other types of authorities that are designed to be subsidized, such as transit authorities like the MTA. HVPA will be a public benefit state corporation that is independently financed, separate from the state’s budget, through authority bonds it issues and revenues it collects from bills people pay. The model of a public authority was designed precisely as a workaround to undertake massive public projects without having to fund it through taxpayers.
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