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Beyond Con Ed: For New York, Public Power Is The Past And The Future

Above Photo: Esteban Jimenez.

There’s an alternative to the utility monopoly’s soaring rates, shoddy service and indifference to climate change.

In the past year, Elsa Martinez has seen utility bills from New York energy monopoly Con Edison soar to as much as $300 per month. The costs seemed inexplicable to Martinez, a disabled Harlem resident.

“​​Half the time I wasn’t home! That’s what threw me off.” Martinez mentions that the high bills may stem from her grandkids watching television. And the fact that she has to leave her hallway light on to make sure she does not miss steps when she gets up in the night — things she fears giving up. Martinez had to turn to Adult Protective Services to keep her lights on, though Con Ed has shut off her power multiple times since the start of the pandemic.

“They’re the pits to me, I call them a bunch of crooks,” said Martinez about Con Ed. “Somebody in that company is scheming, organizing something that’s not right.”

“It’s a great example of why the system is broken,” says State Senator Michael Gianaris (D-Queens) about soaring electricity rates that have left one in five New York State residents at risk of having their electricity cut off according to the Public Utility Law Project.  “The bigger question is, Why don’t we have a utility that prioritizes the concerns of its customers and of the public? Why don’t we have a utility that is worried about how people are gonna make ends meet when they get a 300% jolt to their  electricity bill?”

Con Edison serves the five boroughs and Westchester County. It was organized as a private monopoly at the beginning of the 20th Century by Wall Street financier J.P. Morgan. Since 1973, it has returned a higher annual dividend to its shareholders in every year except two. Last year, it made $1.5 billion in profits and is eyeing a double-digit rate increase for the coming year even as Gov. Kathy Hochul urges the company to review their billing practices so as to “better serve” their customers.

Con Ed and other private utilities across New York State show no sign of abandoning a business model built around squeezing customers, skimping on upkeep and investment and continuing to rely heavily on fossil fuels instead of moving toward renewable energy sources like wind, solar and geothermal.

But, a growing cohort of progressive and socialist state legislators and  environmental advocates in New York are calling for private utility monopolies to be sidelined in favor of a robust public power system that could usher in a renewable energy revolution.

“A public utility would be charged with doing exactly the opposite [of Con Ed] in making sure that there’s a transition to renewable energy and the vagaries of global politics of fossil capitalists don’t affect local people’s energy bills,” says Ashley Dawson, author of Extreme Cities: The Peril and Promise of Urban Life in the Age of Climate Change and an activist with the statewide coalition Public Power NY.

In 2019, New York State lawmakers passed the Climate Leadership and Community Protection Act (CLCPA). It mandates that New York’s electricity sector runs on 70% renewable energy by 2030, becomes greenhouse gas emission free by 2040 and that by 2050 New York achieves an 85% reduction in all emissions from 1990 levels. It’s the most ambitious state-level climate legislation in the country, but no new legislation has been enacted since to begin turning its lofty goals into reality.

However, public power advocates in New York have an ace up their sleeve. The New York Power Authority was launched in 1931 as a New Deal prototype by then-Governor Franklin Roosevelt. It is the largest state-owned public power authority in the country. It provides cheap electricity to public entities, including MTA and CUNY, mostly through hydropower from upstate dams built many decades ago.

Water from the Niagara River passes through a hydroelectric dam the Robert Moses Generating Facility at Lewiston, New York. (Syracuse.com)

NYPA’s productive capacity is capped under state law so it doesn’t directly compete against private utilities such as Con Ed in much the same way that the more efficient government-run Medicare is reserved for people 65 and over that private health insurers are disinclined to cover, or that the post office’s ability to provide basic financial services to unbanked people is limited at the behest of the payday lending industry.

The New York Build Public Renewables Act, which has 59 co-sponsors in the State Assembly and 19 in the Senate, would unleash NYPA’s full potential. Under this legislation, NYPA would become the sole provider of energy to all state-owned and municipal properties and offer expanded energy services to other customers, too, with low-income customers being prioritized. The Build Public Renewables Act also calls for establishing 10 community energy hubs spread across the state. The hubs would assist with everything from helping people adopt energy efficiency measures to setting up local microgrids to helping with billing issues.

“We need to be investing in heat pumps, in wind, in solar throughout the state, in better connecting our grid,” says Assemblymember Robert C. Carroll, the lead sponsor in the Assembly of the Build Public Renewables Act. “All of this could be done if we use the power of the state, especially with this giant [budget] surplus that we have.”

Solar and wind currently account for 4% of New York’s energy supply. A rapid buildout to 70% renewables by 2030 would create as many as 51,000 union jobs and $93 billion in economic activity, according to a report by University of Pennsylvania-based Climate and Community Project. No new taxes would be required as NYPA can issue bonds to be repaid through future revenues. After the initial upfront costs of establishing a green public power grid are covered, utility rates would decrease as the wind and the sun are both free sources of energy unlike fossil fuels, which must be extracted from deep within the Earth, transported long distances and are subject to the whims of global markets.

In New York, launching a Green New Deal doesn’t require starting from scratch so much as circling back to an earlier era when bold public infrastructure projects were in vogue.

New York City relies heavily on natural gas to meet its energy needs, a legacy of former Mayor Michael Bloomberg’s aggressive push in the early 2010s to connect the city to out-of-state supplies in Pennsylvania and other states that were experiencing a production boom. Natural gas was pitched as a cleaner-burning alternative to traditional heating oils, a “bridge fuel” to an even greener future.

That future has continued receding, as costly infrastructure investments are not readily abandoned by their corporate owners. Meanwhile, the U.S. natural gas market has become increasingly globalized and tied into international demand. In 2015, the U.S’s 40-year-old oil export ban, a product of the 1970s oil crisis, was lifted, and U.S. companies began selling record-setting amounts of  natural gas to Europe and Asia where fuel prices — and potential profits — are higher.

With countries competing for a limited natural gas supply, fossil fuel markets are becoming more volatile and the world is experiencing an energy crisis that has only been deepened by the Russian invasion of Ukraine and ensuing embargos against Russian oil and natural gas. Because of the costs and infrastructure associated with the stockpiling of natural gas, which has to be turned into a liquid from a vapor for storage, there is a lack of incentives for long-term storage. The result is a precarious system in which the supply and demand must be carefully balanced, says Alex Gilbert, a fellow at the Payne Institute at the Colorado School of Mines. When a disruption occurs, such as the pandemic or the crisis in Ukraine, the gas market cannot react quickly to these changes and prices climb steeply.

NYC-DSA members David Alexis, Tiffany Cabán and Illapa Sairitupac at the head of a march through Midtown toward Gov. Kathy Hochul’s office to demand she support the Build Public Renewables Act. (Sue Brisk for The Indypendent).

Despite the abundance of natural gas in the United States, consumers at home are now having to compete with other countries for the natural resource.

“We’re now exporting, depending on the numbers we look at, about 15% of our total natural gas supply,” Gilbert says. “That’s a lot we’re sending to foreign markets and because these global markets are really tight right now, we’re actually maxing out our export capacity. We’re exporting as much as we possibly can, so that drives up natural gas prices across the whole of the U.S.,” he says, thus contributing to higher utility bills from Con Ed.

With the adoption of renewable energy through the Build Public Renewables Act, New Yorkers’ utility bills would become untethered to the global market. In addition to the economic benefits for consumers, public power would make it possible to democratize energy in New York.

“The bill requires the authority to present the public with a democratization plan within two years of the effective day,” said Carroll who envisions a board that would give customers a direct say in how NYPA is run, as opposed to private utilities that must answer to their shareholders.

Public power still faces key roadblocks in Albany.

Gov. Kathy Hochul supports a more modest renewable energy plan that emphasizes ramping up imports of hydroelectric power from Quebec and building giant wind farms off of Long Island. The additional power from Quebec would be transported via the Champlain Hudson Power Express, a $3 billion powerline backed by the Blackstone investment firm that would travel underneath the Hudson River.

Assemblymember Zohran Mamdani (D-Queens) said he and Carroll have both met with Hochul’s staff to lobby for the Build Public Renewables Act. But she’s given no indication she will fold the measure into the state’s annual budget.

“We need a new vision that matches the scale of the problem — not a slightly upgraded version of what was there a few years ago,” says Mamdani, a democratic socialist who knocked off a 10-year incumbent in 2020, running in part on a vocal opposition to a gas-fired power plant that was intended for his district in Astoria, which is already saturated with power plants.

Mamdani’s election victory helped persuade the New York City chapter of the Democratic Socialists of America (NYC-DSA) to make the fight for public power a top priority for their organization, says Jay Wu an organizer with the NYC-DSA Ecosocialist Working Group

“When we knocked doors, we found that caring about the climate is not just a liberal, white, rich person issue. It’s a big giant anxiety bomb in the back of everyone’s head,” Wu said. “The way mainstream media talks about climate  leaves people feeling hopeless. We say the climate crisis is not caused by everyone. It’s caused by very specific people who own fossil fuel companies that are polluting the planet and their lobbyists and the politicians that enable them instead of protecting us from them. When you talk about it that way, it’s a fight. And people want to have that fight.”

NYC-DSA has made waves in New York State politics in recent years by defeating six machine-backed incumbent legislators and replacing them with their own members, all of whom are strong supporters of public power. In addition to trying to re-elect its incumbents, the DSA is running a slate of seven new candidates for this year’s June 28 Democratic primary, many of whom are making a climate-oriented appeal in working class communities.

One closely watched race is in Senate District 21 in Flatbush, Brooklyn, where David Alexis is challenging 18-year incumbent Kevin Parker.

Parker is the Chair of the Senate Energy and Telecommunications Committee and is the lead sponsor of the Build Public Renewables Act in the Senate. Yet, the bill has never moved out of his committee. Alexis refers to Parker as “the Joe Manchin of the state senate” due to his role in thwarting progressive climate legislation and criticizes the incumbent for having taken $113,000 in campaign contributions from fossil fuel interests during his career in the state senate.

“Even though he’s a sponsor on the Build Public Renewables and other climate legislation,” Alexis told The Indypendent, “he does not champion them and allows them to die in his committee, ensuring that New York does not get any meaningful change.”

Several members of the DSA slate have backgrounds in climate organizing. Illapa Sairitupac was arrested last June while participating in a civil disobedience outside the offices of state legislators who failed to pass Build Public Renewables Act. This year, he is running for an open seat in Lower Manhattan’s Assembly District 65 which was devastated by flooding when Hurricane Sandy hit in 2012. Further north in the Hudson Valley, Vanessa Agudelo and Sarahana Shrestha were both active in the recently successful battle to stop a gas-fired power plant from being built in Newburgh, New York. They are both now running as DSA-backed candidates for State Assembly.

Sarahana Shrestha holding signs advocating for the Build Public Renewables Act. (@mhvdsa / Twitter).

Agudelo, a former Peekskill, N.Y. city councilmember, is running for an open seat in State Assembly District 95 in northwestern Westchester County. Shrestha is primarying 24-year incumbent Kevin Cahill in District 103 which encompasses New Paltz, Kingston and Woodstock. Shrestha’s district was slammed by a winter storm in February that left 60,000 customers in Ulster County without power for as long as four days amid bone-chilling temperatures.

Shrestha’s campaign used the incident to talk about the poor performance of Central Hudson Gas and Electric, the local power monopoly, and why public power is urgently needed.

“People are very eager to talk to us when we come to the door,” Shrestha says. “They are like, ‘Tell me more about this. Tell me more about the renewable energy economy. Tell me about our energy system.’ People are thirsty to know more information about what can be done. And the hatred for Central Hudson is across the political spectrum.”

Back in Albany, Mamdani says bringing another cohort of socialist climate organizers into the state legislature will have “a tangible effect.”

“It’s through organizing that you can punch above your weight,” Mamadani says. “It becomes harder and harder to deflect the legislation.”

But, he adds, you don’t have to be a socialist for public power to be an issue to get behind.

“This is a battle that resonates with everyday New Yorkers,” Mamdani says. “No one likes to be held hostage to a corporate monopoly whether it’s having to fight with them over the phone about a bill or dealing with faulty service or knowing they aren’t responding to the latest IPCC report that shows the urgency of the climate crisis.”

 

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