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It's likely the Board of Public Utilities will be looking at an electric rate hike in the near future.
City Council members questioned Dave Leathers, Board of Public Utilities general manager, regarding future electric rate increases during his report at the most recent City Council work session.
Following the presentation by Leathers regarding the Climate Smart Communities pledge, City Councilwoman Marie Carrubba, D-Ward IV, asked for updates regarding the BPU's operations. Carrubba specifically asked Leathers if the BPU anticipated costs going up for city residents in response to rising costs and inflation.
"I think there's certainly risk for that," Leathers said. Over the last year to year and a half, there has been really difficult inflationary expenses."
Leathers told City Council members that inflation, vehicle acquisition and supply chain issues over the past 15 months have made it much more difficult and costly for the BPU to operate. Leathers said the BPU has attempted to control and manage expenses in the face of higher costs, allowing the utility company to enter into 2023 with only a water rate increase for its customers.
"Looking forward, I'm concerned about the electric rate for our customers," he said. "Nothing related necessarily to a huge rate increase for customers, but a lot of the state fees and state mandates are going to be coming to our fuel adjustment, which is the variable part of our rate."
According to Leathers, the BPU already has charges included in customers' bills as a result of zero emission credits, renewable energy credits and subsidies for nuclear plants. He indicated that more of the state-mandated climate act items will be shared throughout the state in the future.
"I think between now and 2026, now and 2027, there's exposure that electric bills could go up, separate from whatever we do with our electric rate," he said. "I do anticipate that we would approach the Department of Public Service for a rate case in the next year or two. Our last minor rate case, that order came out in March of 2016, so it's already been seven years since the last rate adjustment and that was pretty nominal at that time."
Leathers said the electric division of the BPU has not had many rate increases in recent years. While he indicated that the BPU would "probably be looking at that," he said any BPU electric rate increases would not be "too significant" in the near future.
"The rest is water, wastewater, solid waste and district heat," he said. "We do our best to manage it so that we don't have large increase."
Following Leathers' explanation of the potential for future electric costs to increase in the coming years, City Councilman Jeff Russell, R-At Large, asked if the state's fees, which he referred to as taxes imposed by residents by the state, were the result of the city using fossil fuels. Leathers explained that the state fees resulted from the Clean Energy Standard passed in 2016 and the Climate Leadership and Community Protection Act that was passed in 2019.
"That created the state direction," he said, "and this is all part of that state direction."
Asked by Russell why the state fees are not separate line items on each customer's bill, Leathers said that the Clean Energy Standard's guidelines from 2016 specifically indicated that the fees would not be included as separate line items.
"Why would New York state not be transparent with people about what fees they are having to pay, in which the BPU obviously has to pass on to customers?" Russell asked. "Why would the state not be transparent with people for showing these fees that they're paying on a monthly basis?"
While Leathers said he did not have an answer for Russell's questions, he suggested that there is "tons of transparency" in the standard and in the legislation. Nevertheless, Russell said the state should be "more transparent" so that each resident knows why electric bills will be increasing in the future.