Schumer Urges Further Federal Investigations Into Winter Energy Bill Spikes

In the wake of extraordinary rate hikes during the winter, Senator Charles Schumer has requested the the Federal Trade Commission (FTC), a government organization meant to protect consumers, investigate New York area power companies to make sure the increases were not a result of corruption or gouging.

The Federal Energy Regulatory Commission (FERC), which provides similar oversight of power and energy suppliers, has already launched an investigation into electric companies including Con Edison.

Schumer is pushing the FTC to coordinate with FERC, and provide them with resources for the investigation.

“I write to urge that the FTC directly support ongoing investigative efforts led by the Federal Energy Regulatory Commission (FERC),” Schumer writes, “to determine whether any wrongful conduct or uncompetitive practices took place this winter as record cold temperatures drove up natural gas and electric prices to record levels.”

In the same press release, his office explains that the rise in energy costs is suspicious.

“Utilities throughout the state have attributed the increase to record-low temperatures and high demand for natural gas, but Schumer said that the size of the rate increases were so high that he is concerned it outpaced the actual increase in wholesale energy costs for utilities.”

His office has requested that the “entire wholesale electric and natural gas markets” be investigated to make sure that customers were not being improperly overcharged. Schumer would also like to see electricity rates come back down.

To illustrate this rise, Schumer pointed to examples like a Brooklyn Con Ed customer who was charged 13.82 cents/kWh in February 2013 and 20.52 cents/kWh in February 2014. In New York, most electricity is generated with natural gas, so the price of natural gas has an outsized impact on electricity bills.

Earlier this year the New York Post reported on this rise and pointed out that the “supply charge” is the reason for an increase in price.

The supply charge, which covers the cost of actually generating electricity, is the source of this winter’s power-bill misery.

Con Edison’s electricity supply charges are adjusted daily, the company says. The number that shows up in bills is an average of the daily prices.

A Con Ed customer with a billing period from Dec. 30 to Jan. 30 paid an average supply charge for the month of 23.1 cents per kilowatt hour — a shocking 83 percent boost over the 12.6-cent charge during the same period last year.

Schumer has previously asked federal regulators to investigate the price increase. Syracuse news reported earlier this month that Schumer sought a federal probe into the matters.

They wrote:

Schumer said he has no evidence of wrongdoing but sees no good explanation for why consumer electric bills jumped 60 percent or more compared with last winter.

“Like you, I’m concerned that utilities are using the cold weather and the demand for natural gas to justify skyrocketing rates,” Schumer said today. “We can’t let those factors protect these multibillion-dollar dollar companies from scrutiny.”

Schumer also questioned whether wholesale energy companies manipulated electric or gas markets by withholding capacity to drive up prices.