Ordered to pay fine, provide refunds over marketing
The company contracted to supply clean energy at a money-saving fixed rate for Central Hudson customers in Beacon, Cold Spring, Philipstown and seven other Hudson Valley municipalities has twice been accused by the state of misleading customers.
Now, amid accusations that it wants to break that three-year contract less than a year after it took effect, the company is facing the possibility of a lawsuit from the company that administers Hudson Valley Community Power.
The energy program is a consortium of 10 local municipalities that contracted with Columbia Utilities last year to purchase electricity from renewable sources at 6.6 cents per kilowatt-hour for residents and 7.1 cents for small businesses through June 30, 2024. The program is administered by Joule Assets.
In an April 26 filing with the state Public Service Commission, Joule alleges that a document filed by Columbia Utilities a week earlier with the agency is actually a notice to terminate its agreement to supply electricity for HVCP.
However, the copy of the notice was completely redacted, except for the Columbia Utilities letterhead, making it impossible to confirm its content. (On May 16, the agency rejected Columbia’s request to keep the notice secret and ordered it to file an un-redacted version by Thursday, May 26.) Columbia Utilities officials have not responded to repeated emails seeking comment.
Beacon, Marbletown and Saugerties are among the municipalities that have endorsed a lawsuit by Joule. The Philipstown Town Board in Philipstown on Wednesday (May 25) postponed a decision on whether to add its support.
Supervisor John Van Tassel cited reservations from Stephen Gaba, the town attorney. Gaba, after an initial review of the proposed documents, advised the Town Board to avoid signing anything yet, Van Tassel explained. Board members expressed hope of working with Gaba to tweak whatever needs tweaking.
Before his election, Board Member Jason Angell was part of a team that helped organize HVCP. “You shake hands, you make a contract, that contract is good,” he said last week. “You don’t get to just back out of it all of a sudden midway through because it’s a good deal for one side.”
The firm has faced harsh criticism before, and been told to reimburse customers. In 2012, then-Attorney General Eric Schneiderman announced that Columbia Utilities and an affiliate, Columbia Power, had agreed to refund $2 million to 2,700 customers, including in the Hudson Valley, to settle accusations that it promised 15 percent or more in savings but “fleeced customers with much higher bills.”
The firm also assured people that they could end their participation at any time but locked them into 12-month contracts, according to the Attorney General’s Office.
In March of this year, Attorney General Letitia James fined Columbia $555,000 after accusing the company of violating an amendment to that 2012 agreement that prohibited the company from using door-to-door marketing without state approval.
Columbia agreed to pay $55,000 in restitution to 912 customers who signed 1,334 contracts during unapproved door-to-door marketing in November and December 2020, primarily in New York City, Albany, Syracuse, Rochester, Ithaca, Utica and Watertown, according to James’ office.
According to Joule, the agreement with Hudson Valley Community Power saved about 25,000 residents in the 10 municipalities $5.7 million through the first three months of 2022. While they were paying 6.6 cents per kilowatt-hour, the price charged by Central Hudson rose to more than 20 cents in February before dropping to 6 cents as of May 11.
“It’s clear residents are benefiting” from the contract, said Glenn Weinberg, vice president of sales and market development for Joule. “And that’s what we’re hoping to defend.”
Liz Schevtchuk Armstrong contributed reporting.