Low-income community members and advocates call for alternatives to 7.2% rate hike proposed by National Fuel Gas

On Tuesday evening, June 28, 2016, at 6:45pm low-income community members and advocates representing the Crossroads Collective, and their allies, rallied outside the Town of Amherst Municipal Building located at 5583 Main St. in Williamsville, NY, where the New York State Public Service Commission (PSC) held public statement hearings as part of a rate case involving National Fuel Gas Distribution Corporation. Those who rallied and testified at the hearing called into question the legitimacy of the proposed rate hike, and expressed frustration with the inaccessible venue chosen for the PSC hearing.

In late April 2016, National Fuel Gas petitioned the PSC to increase delivery rates by 7.2% for all end users in its service territory. In public statements and testimony to the PSC, National Fuel Gas has claimed the rate hike is necessary to generate an additional $41.7 million in revenue to modernize existing gas delivery infrastructure, expand delivery infrastructure to new areas in its service territory, acquire interstate transmission pipeline infrastructure, and enhance utility bill discount programs.

The proposed rate hike, if approved, would disproportionately impact thousands of low-income National Fuel customers living in the City of Buffalo, which has some of the oldest housing stock in the country. Low-income residents of Buffalo too often live in older, substandard housing that lacks proper insulation and energy-efficient, modern heating and cooling systems. As a result, they consume more natural gas and electricity than residents living in higher-quality, energy-efficient housing. This condition drives up utility bills to unaffordable levels and feeds a cycle of utility service shut-offs and energy poverty.

In addressing issues of accessibility and public accountability, Crossroads Collective partners called on the PSC to hold an additional public statement hearing in the city of Buffalo in August. “We cannot afford to pay anymore for our gas bills. We cannot afford to invest more in an infrastructure that is destroying the planet. We can build a renewable future that puts people and planet over profit. Our communities deserve a seat at the table and opportunities to engage in this process where we live, not in some distant suburb,” said John Washington, Campaign Organizer at PUSH Buffalo.

While a small percentage of the revenue generated by the proposed rate hike would be allocated to a utility bill discount program for low-income customers, the PSC, in a separate order issued at the end of May, has limited the reach of these programs statewide to customers who receive Home Energy Assistance Program (HEAP) benefits. A large majority of the HEAP-eligible population across the state, including those in Erie County, who do not receive HEAP benefits would be shut out from participating in utility bill discount programs like the one proposed by National Fuel. These low-income customers would be particularly vulnerable to the adverse economic impact of a rate increase. Crossroads Collective partners called on the PSC to address equity concerns in the context of the current National Fuel rate case, specifically in relation to low-income program eligibility and opportunities to recover program costs utilizing a progressive rate structure that takes into account a customer’s financial ability to pay higher rates. Sam Magavern. Executive Director at Partnership for the Public Good said, “Our new report on energy poverty, which chronicles recent attempts to hold National Fuel more accountable, reminds us what a difference ordinary residents can make when they raise their voices together to ask for fairness and accountability.  Too often, state regulators find themselves in a room with only big business speaking. When that happens, customers and the environment usually end up the worst for it.”

Crossroads Collective partners also spoke out strongly against the company’s proposal to invest millions of ratepayer dollars in new and existing natural gas infrastructure. As the PSC and Governor Andrew Cuomo seek to transition the electricity sector in New York State away from fossil fuel-based energy generation toward clean, renewable energy sources, and reduce greenhouse gas emissions 80% by 2050, it would be reckless to allow National Fuel Gas to pursue long-term investments in gas infrastructure at ratepayer expense. These investments would keep communities across Western New York dependent on an extractive utility business model and a dirty fossil fuel source that pose clear and present dangers to climate stability and public health.

“Modernizing fossil fuel infrastructure in the 21st century is an oxymoron and a perversion of the public trust. The PSC and Governor Cuomo have made a commitment as part of their Reforming the Energy Vision agenda to transition the electricity sector in NYS to clean, renewable energy. This represents a first step in the electrification of our entire economy. We need to be advancing alternatives to natural gas now rather than propping up the industry on the backs of ratepayers, especially those from our most vulnerable communities,” said Franchelle Hart, Executive Director of Open Buffalo.

In highlighting the availability of alternative renewable energy sources, Bill Nowak, Executive Director of NY-GEO said, “Geothermal heating and cooling systems have already replaced natural gas heating in thousands of buildings across New York State, efficiently cutting greenhouse gases and operating costs at the same time. This is the wave of the future for heating and cooling. Local examples include numerous homes throughout WNY, the Riviera Green development by Natale Builders in Clarence, PUSH Buffalo’s Net-Zero House on Winter Street, St. Michael’s Lutheran Church in Akron, and the new development going up at Grant and Potomac on Buffalo’s West Side.”

And following the recent announcement by National Fuel that it planned to distribute millions of dollars in dividend payments to shareholders, and with company CEO Ronald Tanski compensated at a rate of $6.7 million in 2015, advocates made clear that National Fuel has no business turning to customers to raise additional revenue.