Can Cuomo Prevent 12 Percent Electricity Rate Hike

If you are a New York electricity customer then you should prepare yourself for a huge financial hit in the month to come. That is, unless Gov. Cuomo has his way. He is working to get a proposal voted into law that would reverse an earlier decision for a rate hike. If his proposal fails then New York electricity customers could see a whopping 12% increase on their bills beginning at the start of May.

Previously the Federal Energy Regulatory Commission approved the rate hike decision. It would increase area electric rates by $500 million per year. Individual customers would pay 12% more than they currently do, something that most residential customers would likely struggle to do give the state of the economy!

Gov. Cuomo says that the basis of the rate hike approval is related to property taxes that are charged to electricity companies. Basically they have abatements that can be pulled at any time and if that happens they would incur huge costs that they want to pass on to customers by raising rates now. What Cuomo is proposing is to offer permanent property-tax abatements to those companies. Without the risk of increased property tax costs, the companies don’t have a reason to justify the rate hike and customers would therefore be saved from exorbitant bills.

A spokesperson for Cuomo made the great statement that this is a "common-sense fix". This makes sense. Why charge New York electricity customers money based on a risk that may never happen when a promise that the risk won’t occur could be issued instead? The Federal Energy Regulatory Commission is having a meeting on May 19, 2011 at which they will make a decision about Cuomo’s proposal. It is expected that they will see the "common sense" in this and agree to reverse their earlier rate hike based on this information. However, you never know what may happen. If they do choose not to reverse their decision then the 12% rate hike is set to go into effect on May 28, 2011. Keep an eye on the news to make sure that your energy bills aren’t affected so that you don’t get shocked at the end of May!

Source: http://www.istockanalyst.com/business/news/5062747/andy-s-power-line-i-ll-undo-12-rate-hike