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Rochester Gas and Electric is failing our community. As a City Councilmember and a County Legislator, we see and hear about these failures regularly from our constituents. RG&E routinely makes huge billing errors and take far too long to correct them. They send exceptionally high, out-of-the-norm bills because their previous estimates were so poorly done. And despite their costly, job-killing switch to remote metering, some months RG&E skips sending a bill altogether, making the next one twice as high. Billing issues like these are difficult for everyone and particularly devastating for small businesses and families that live paycheck-to-paycheck.
The authority to regulate utility companies like RG&E lies with the state Public Service Commission. State law charges the PSC with “setting rates and ensuring New York’s utilities provide adequate service.” They are the body tasked with utility oversight and who also decide, every three years, if these same companies can raise their rates. The seven members of the commission are appointed by the governor, approved by the state Senate, and are paid a very competitive annual salary.
A review of recent events demonstrates that the failures of RG&E reflect an even bigger failure of the PSC. Has the PSC become so toothless that it cannot do its job anymore? Or has RG&E evolved into a complex web of corporate structures that obscures information to make effective regulation impossible? Either way, New York needs to urgently address the PSC’s failures that were made very clear in an audit released May 19.
The story starts a few years ago when the PSC conducted a comprehensive management and operations audit of RG&E. In May 2024, the PSC imposed $7 million worth of fines on RG&E for customer service shortcomings. While this investigation was underway, RG&E proposed a rate hike. The PSC did not approve the entirety of this request, but still granted RG&E the ability to increase electricity rates by more than 5 percent per year.
In other words, the PSC both cited RG&E’s poor customer service and gave them the authority to upcharge their customers. With this in mind, last month’s audit report was a significant indictment of the PSC.
The report “found that the companies’ Customer Service Performance Indicator metric reports have been inaccurate.” This suggests that during the 2023 investigation, the PSC examined and accepted faulty data. Moreover, the report noted that “Avangrid’s complex corporate structure makes it difficult to determine if the charges it allocates to NYSEG and RG&E are based on cost causation.” This means that in 2023 the PSC approved RGEs rate hike without comprehending the underlying formula.
These overt failures at regulation must spur action by the state. How could one agency reprimand a company for inadequate customer service and at the same time approve their proposal to charge more money to customers? How can rate increases be approved with no comprehensible data? This makes no sense and must be changed.
If the PSC is not going to effectively regulate failing companies like RG&E, then the state must provide an alternative pathway. There is a proposal on the table in the state Legislature that moves in the right direction. State Sen. Michelle Hinchey and Assemblymember Sarahana Shrestha introduced legislation to create a new Hudson Valley Power Authority that would buy out the utilities currently operated by Central Hudson, which suffers from many of the same shortcomings as RG&E. Hinchey and Shrestha clearly do not believe that the PSC can fix Central Hudson, so their proposal directly addresses the major funding and legal hurdles to creating a new, publicly-owned utility.
If the state Legislature does not want to strengthen the PSC or create new public utilities, there are other options on the table. They can give cities or counties like Rochester and Monroe the necessary financial tools to buy out specific parts of the grid to create smaller, municipally-owned utilities. But something has to give.
The PSC’s failures should be particularly alarming to all of us because the very concept of regulation is under attack at the federal level. When the Trump administration eliminates departments like the Consumer Financial Protection Bureau, New York should lean in and strengthen the regulatory mechanisms that protect our communities. Companies like RG&E should not be allowed to continue increasing prices while failing to meet the needs of their customers.
It’s time to for New York to fix the PSC or create new publicly-owned utilities that will better serve the families and businesses in our community.
Mitch Gruber is at-large member of Rochester City Council. Sue Hughes-Smith is a member of the Monroe County Legislature representing the 14th Legislative District, which includes portions of Brighton and Penfield.
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Climate Change is real, and it’s manmade. Science has documented the increase in greenhouse gases in the atmosphere, which consists of compounds that can only be caused by the combustion of fossil fuels. Even without the atmospheric science, the real effects of ocean heating and melting ice are being felt every day by the increase in hazardous weather all over the planet.
RG&E’s coal-fired power plants were more than sixty years old when they were retired, unable to meet even the minimum emission requirements. However, the primary culprits behind the increase in consumer costs are utility deregulation and the lack of new baseload generation being built in the state after the old power plants were retired. Only last week, Governor Hochul announced that the state needs new nuclear plants to remain economically competitive. Over the past few years, I’ve encouraged Beacon readers to visit the NY Independent System Operators (NYISO.ORG) website to see for themselves what form of generation is creating electricity at any hour of any day, and guess what the majority was coming from: fossil fuel peaking generation, mainly located downstate. So, despite the environmental agencies’ best efforts, we are basically where we were twenty years ago in terms of contributing greenhouse gases to the atmosphere. Governor Cuomo was also responsible for shuttering two greenhouse-free generating stations in Westchester County before his ignoble departure from Albany..
Correct me if I’m wrong, but I have yet to see a deregulation scheme in any industry that has resulted in lower costs or better service to consumers, such as in the airline, banking, or insurance sectors.
The article doesn’t address the real elephant in the room. That is, the mandates by New York State’s misguided energy policy which is based upon exaggerated man made climate change hysteria is the real problem. By phasing out fossil fuels NYS is already seeing skyrocketing energy costs that RG&E has no control over. The biggest contributor to climate change is the sun not man. Over the past few decades historically high solar flares have occurred. Furthermore, carbon dioxide is essential for the production of oxygen on earth and green plant life through the process of photosynthesis. Besides earth’s food supply green plant life is the component of thousands of essential products like lumber. Some experts maintain Earth needs more carbon dioxide not less. Without enough fossil fuels RG&E and us ratepayers will literally pay a big price.
This all sounds nice Mitch, but the missing context is that you’re the deciding vote that’s refusing to move this process forward at the City level. A locally led study would be professionally done by a third party, would look at feasibility at the city and county levels, and the money is just sitting there. If you think it’s urgent and important, why not use your power to act, under the process that the state outlines to do so, where a city or county leads? It seems you’re also spreading misinformation about how a bonding process at the city or county level would work for a public utility – they happen through revenue bonds, not general municipal bonds. While all this could be addressed with a local study. This seems like deflection to me.
I’m confused, does this story mean Mitch is supportive of the city going through with the public utility feasibility study on its own? Would he want people to put pressure on the county leg to pass their half of the funding?
Because otherwise, I don’t really know what the point of this letter for him is other than to win some brownie points with more left leaning voters during primary season.
RG&E’s failures demand action. PSC must strengthen regulation or NY should create public utilities.
The public utility study funded by Rochester City Council should be conducted and then followed up in a deeper community conversation. State representatives should join with county and city elected officials to support this exploration. A variety of pathways should be explored to identify solutions to obvious and apparent problems. It isn’t enough to complain.
As a point of clarification, I did not intend to suggest the authors of this piece were only complaining. Not at all. My comment about complaining was an observation about what I generally hear from frustrated/angry RGE customers.
I can’t disagree with any of the complaints the authors make about RG&E or the PSC, but something important is left out. RG&E is failing to provide power to entire parts of Monroe County. Literally, there is no power available in certain areas for any new development, including new housing.
RG&E claims the PSC is responsible because it has not approved past requests for rate increases. Whether we believe them or not, that claim gets to a larger point about the failures of RG&E and the role of the PSC. RG&E cannot competently conduct its day-to-day business and cannot competently plan for the future. The PSC is failing to provide needed guidance. And as far as I can tell, our state government is not giving this issue the attention it needs.
I’m no longer as well informed about the details of RG&E’s system planning as I once was. There is no doubt that multiple state agencies, as well as the legislature and the governor’s office, consistently fail to meet expectations for power generation. Although RG&E requires substantial financial support from its owners (shareholders) to cover the costs of investing in new transmission and distribution infrastructure, which ultimately will be borne by ratepayers, the bigger issue is where the power will come from. One great source of real-time data is the NYISO.ORG dashboard, which displays the sources of power and their associated costs. There is also the issue of balancing load and generation, so we need new power plants in Western New York if more developers want to create new demand. The situation is akin to the oil embargo of the early 70s, when everyone wanted to switch from oil to gas; if you didn’t already have a gas hookup, you were out of luck. Supply and demand are not in balance.
Avangrid Owns the RG$E. A Spanish Company does not play by Our Rulls – – –
I don’t want to come across as an apologist for RG&E. However, I worked for them for twenty years, and before that, I worked for the New York Power Pool, so I have unique and expert insights into what it takes to provide gas and electricity to consumers. To be clear, I worked for the “old” RG&E. I was, and still am, vehemently opposed to the legislative decisions first to deregulate utilities and then to allow foreign ownership of any US utility. As far back as I can remember, even growing up in New York City in the fifties, consumers were always unhappy with either Con Ed or Brooklyn Union Gas, the utilities that served us. Utilities are perennial targets of resentment.
I counsel local elected officials to acquire a. deeper understanding of just how complex and costly it is to provide utility services. No doubt, there are many avenues for significant improvement and transparency from Iberdrola, Avangrid, NYSEG, and RG&E. Perhaps when Democrats regain both Houses of Congress and the Oval Office, a concerted effort could be made to revisit deregulation and foreign ownership of US utilities. We still need a comprehensive, green, and sustainable energy policy with incentives to modernize and protect our energy infrastructure.
Carving out a new municipal or government-owned and operated power company is fraught with a plethora of unanticipated minefields, with absolutely no guarantee of an improved consumer experience. At a ten-thousand-foot level, the entire electric production and transmission system, sometimes referred to as “the grid,” is also in serious trouble. Citizens, of course, are not expected to understand the systems that allow them to benefit from virtually uninterrupted, quality power 24/7/365 whenever they need it.
Executives and senior managers at the “Old” RG&E wanted to sell the company with all its power plant liabilities, and many of them walked away with outrageously generous payouts. It doesn’t matter if the ratepayer or the customer paid for them; in the end, the customer pays for everything. To make the company as attractive as possible to suitors, significant and expensive infrastructure projects were put on hold, and power plants were retired. Numerous employees with decades of experience were made redundant, and no one bothered to document the knowledge and experience they possessed. I do not doubt that we will still have “issues” for years to come. The pandemic excuse is no longer valid, as the company has had plenty of time to recruit and train the next generation of employees. Despite the automated meter reading teething problems, it will eventually provide the most seamless and accurate customer experience.
The PSC is an entirely different matter. They must examine the state as a whole and consider energy supply, safety, and cost from every perspective, not just that of unhappy consumers. In most cases, the majority of customers never complain, pay their bills on time, and go about their busy days. If Council Member Gruber and his elected colleagues want to change the system, by all means, use your state representatives to put forward the names and CVs of people you’d like the Governor to consider appointing to the PSC.
The only group less-qualified than RG&E to operate a public utility would be the Rochester city council. With them at the helm we’d be back to using candles and lamps for illumination within two years.
Why can’t Rochester create its electricity? Through the massive hydroelectric power available in the river and the possibility of solar and wind farms in the county, I believe that switching to a system like this would be far more beneficial to the customers. I know there must be a Gordian Knot of issues to unravel and untangle, but the city should be doing everything it can to look into alternatives to RG&E. This company has been so bad, has raped it’s customers FOR DECADES to the benefit of its shareholders, and doesn’t look like it’s getting any better, especially with a toothless PSC.
By all means tell us what local governmental entity has the skill sets, expertise and trustworthiness to operate “people’s utility company”?
Fairport Electric would be a good example of where one might start. It is a public-owned utility whose electricity prices have been FAR below the Rochester level for decades..
With all due respect, equating the operational expertise needed to run a local electric-only utility company with about 17,000 custoners to that needed to run a gas and electric utility with a combined customer base over nine counties, totalling in excess of 700,000 (part of a larger entity with over 3,000,000 customers) is something that can’t be taken seriously.
Very good article here. Attention to this is long overdue.