Beacon to vote Monday on $1.5 million settlement
Cold Spring and Philipstown this week approved a proposed $1.5 million settlement with a utility company that abandoned a contract to sell renewable electricity to residents and businesses. The Beacon City Council is expected to vote on the proposal on Monday (July 1).
The village and town boards each approved resolutions on Wednesday (June 26) authorizing the settlement with Columbia Utilities, which for two years has fought a lawsuit filed by 10 municipalities that jointly purchased fixed-cost energy under a community choice aggregation (CCA) program called Hudson Valley Community Power.
Among the CCA’s other former members, the Town of Red Hook, the Village of New Paltz and the Town of New Paltz have approved the proposal. The City of Poughkeepsie and the towns of Clinton, Marbletown and Saugerties have not yet voted.
If approved by the state judge in Ulster County handling the lawsuit, Columbia Utilities would admit no wrongdoing but pay $1 million into a settlement fund by Aug. 1 and the balance in monthly $50,000 payments by June 1, 2025.
Up to 20 percent of the payout could be used for legal expenses, plus additional funds for administrative fees and taxes. The balance would be distributed in equal amounts to customers who were enrolled in the program as of July 18, 2022.
Customers would be able to opt out of the settlement; if more than 10 percent choose that option, Columbia can withdraw. That would negate a compromise forged during a daylong mediation in April involving the parties, Central Hudson and the state Public Service Commission.
After that session, the municipalities concluded that a settlement would be “fair, reasonable, adequate and in the best interests” of the CCA customers, according to settlement documents.
Columbia Utilities had agreed in 2021 to a three-year contract to supply the 10 municipalities with electricity from renewable sources at 6.6 cents per kilowatt-hour for residents and 7.1 cents for small businesses. Residents and businesses were automatically enrolled but could opt out and continue receiving electricity from Central Hudson.
According to program administrator Joule Assets, the 24,000 customers who stayed with Hudson Valley Community Power saved about $7 million before the deal with Columbia Utilities fell apart (including $941,380 in Philipstown, $216,050 in Cold Spring and $651,800 in Beacon) and prevented the release of 25,560 metric tons of the greenhouse gases that cause global warming.
In February 2022, while CCA customers were paying a fixed rate of 6.6 cents per kilowatt-hour, Central Hudson’s variable rate rose to more than 20 cents because of Russia’s invasion of Ukraine and its effect on energy markets.
That same month, according to the lawsuit, Columbia Utilities began telling Joule and the municipalities that it couldn’t fulfill the contract, blaming Central Hudson’s ongoing problems with its billing system.
What Do I Pay?
In Cold Spring, the CCA’s default fixed rate for residents and small businesses through June 2025 in Cold Spring is 12.24 cents per kilowatt-hour for 100 percent renewable energy.
In Philipstown and Nelsonville, the default fixed rate is 11.24 cents for 50 percent renewable energy.
The standard fixed CCA rate is 9.87 cents. The variable rate charged by Central Hudson, which continues to handle billing, delivery and repairs, was 7.58 cents on June 12 and has averaged 8.3 cents over the past year. It hit 12 cents in March.
Customers can opt out of the CCA or change their rate by calling Hudson Valley Community Power at 845-859-9099 on weekdays between 9 a.m. and 5 p.m.
In April 2022, the company notified the Public Service Commission that it intended to transfer CCA customers back to Central Hudson, spurring the lawsuit. Although a judge temporarily barred Columbia Utilities from transferring customers, it happened anyway when the New York Independent System Operator banned the company from the energy markets for failing to post $3.5 million in collateral to meet creditworthiness requirements.
As part of the settlement, the Public Service Commission will not use claims from the lawsuit to challenge Columbia Utility’s effort to re-enter the energy market and allow the company to remain eligible to supply electricity and gas.
Meanwhile, in July 2023, Cold Spring, Nelsonville and Philipstown joined a revived Hudson Valley Community Power that has nine other members (not including Beacon, which opted out) and a new supplier, Direct Energy Services. The contract runs through June 2025.
