Arsteca.net

Let's fire National Grid

The City has the contractual right to takeover local operations of its own franchise.

September 17, 2018

From 2002 to 2012 we were billed an extra $4.8 Billion for acquisition costs and "stranded costs" (which include "Competitive Transition Charges" (CTC)), which amounted to a ~50% increase in service rates. In 2012, when the surcharge expired, NatGrid asked for and received approval from the PSC for new charges that approximately equaled the expiring surcharge. How was this presented to the public? Something equivalent to: NatGrid's new rate request includes new items but customers will not see an increase in their bills compared to last year... Pretty slick. We are still paying an extra ~$400 Billion/yr in dubious charges and are still being told misleading statements by NatGrid, all under the approval of the PSC.

Bottom line: since 2002 our utility rates jumped ~50% and those rates are ~50% above national average rates, despite the relatively low-cost power available in upstate NY. Perhaps National Grid is just not capable of running an electric utility efficiently. Therefore, the City should exercise its contractual right to takeover operations of its local franchise.

The City has the contractual right to takeover the local electric/gas franchise and rid us immediately of ~5c/kW/hr in bogus electric rates, which would reduce our rates by 1/3. We know from Solvay and other municipal power utilities that distribution costs are much lower than NatGrid claims, suggesting an additional minimum 2c/kW/hr savings. Then subtract NatGrid imputed overhead charges on NiMo, plus the ~9% guaranteed profit margin, and it becomes clear that a municipal or 501C12 community-owned and operated power utility can provide residents ~50% lower rates. And the City won't have to pay $15 million for the street lights.

As if that weren't enough reason, we will be free to contemplate building our own power generating facilities, including the choice of carbon based or renewable energy; free to make infrastructure investment choices as benefits us the most; free to leverage franchise infrastructure to build a more intelligent power grid and a city-wide fibre-optic (FTTH) broadband network at the same time that would provide much higher (gigabit) speed at 1/2 the monthly costs of Spectrum.

With ~50% lower power utility costs, and ~50% lower broadband costs, approximately $100 million and $30 million per year savings respectively, local residents will save ~$130 million per year...after year...after year from local ownership and control of our power utility.

I urge City officials, industry experts, lawyers, accountants, and community leaders to get together to discuss and formulate an action plan to takeover operations of the local power franchise, an option clearly defined in our contract with the current franchise operator. Ask the mayor for a copy of the 1897 electric franchise contract so you can judge for yourself the City's authority to takeover the franchise. Here is a legal opinion from the SU Law Clinic (c. 2009): SU_Public_Power.pdf