Could a utility owned by the public, rather than Central Hudson, deliver lower electricity costs?
Many people believe it would, and last year, two state legislators introduced a proposal to make it happen by creating the Hudson Valley Power Authority. The bill outlines the process by which the state would create a “democratically governed” nonprofit corporation that would provide “low rates, reliable service, correct and easy to understand bills, clean energy, community benefits and environmental justice.” The goal would be to keep residential electric bills from exceeding 6 percent of household income.
It would not be the first public utility, even in New York. Along with the state-owned New York Power Authority and the Long Island Power Authority, there are at least 50 municipal utilities in New York, mostly in rural areas. For the rest of the state, the delivery of electricity is monopolized by six investor-owned utilities such as Central Hudson, which has been owned since 2013 by Fortis, a Canadian holding company. In return for their monopolies, these utilities are regulated by the Public Service Commission, which must approve rate hikes and capital projects.
Establishing the Hudson Valley Power Authority would not only lower rates but coordinate with the state’s long-term climate goals while protecting Central Hudson’s 1,130 employees, according to the two Democratic legislators who introduced the proposal, Sen. Michelle Hinchey (whose district includes parts of Dutchess and Putnam counties) and Assembly Member Sarahana Shrestha (whose district includes the northwest corner of Dutchess). “I don’t think the role of government is to empower the private sector,” Shrestha said. “This would put public goods back in the hands of the public.”
How it could happen
Shrestha and Hinchey’s legislation calls for the Hudson Valley Power Authority to purchase Central Hudson and take control of a system with 315,000 electric customers and 90,000 natural gas customers in parts of nine counties, including Dutchess and Putnam. If Central Hudson refused to sell, the legislation suggests authorities could use a legal process called eminent domain to compel a sale.
Tom Konrad, a chartered financial analyst who is the chair of the Marbletown Environmental Conservation Commission, is leading a plan in the Ulster County town — the Hudson Valley’s first — to transition to 100 percent renewable energy. He estimates that it would cost between $2.2 billion and $3.6 billion to acquire Central Hudson, including its $1.4 billion in debt.
The Hudson Valley Power Authority (HVPA) would be overseen by a nine-member board appointed by the governor and the Legislature, which would also include the business manager of the International Brotherhood of Electrical Workers Local 320, the union representing about 700 Central Hudson employees.
Assembly Member Sarahana Shrestha, shown here at a rally in Kingston, introduced legislation to create a Hudson Valley Power Authority. (Photo provided)
In addition, an independent “observatory” modeled after the Paris Water Authority and composed of elected representatives and members of academic institutions would help the board with “community participation, transparency, research and accountability,” Shrestha said.
The newly formed utility would retain Central Hudson employees represented by labor unions and assume those agreements, including retirement benefits. After buying Central Hudson, the HVPA would be obligated to bargain “in good faith” with union representatives.
The bill also aligns the HVPA with the goals of the state’s Climate Leadership and Community Protection Act, directing the utility to procure 70 percent renewable electricity by 2030 and 100 percent renewable electricity by 2040, provided the supply is available.
At least 35 percent of the benefits of clean energy and efficiency programs, such as reduced pollution through the phasing out of fossil fuel-burning plants, would be allocated to disadvantaged communities within the service area.
Shrestha doesn’t expect either Senate Majority Leader Andrea Stewart-Cousins or Assembly Speaker Carl Heastie to call for a vote until the bill has sufficient momentum to pass, which she said could take two or three years.
Counterweight
In the early 20th century, the energy industry sought monopoly rights, arguing that competing companies — each with their own grid and wires — would raise prices. In 1931, as a counterweight to the power of firms such as Con Edison (owned at the time by J.P. Morgan), the Legislature created its own utility, the New York Power Authority. Gov. Franklin D. Roosevelt said he hoped the New York Power Authority would become “the forerunner of cheaper electricity.”
In 2023, state lawmakers granted the NYPA “expanded authority” to pursue renewable power sources, including solar, wind, geothermal, and battery storage. It also established a mechanism for developing clean-energy workforce training programs and a bill credit program for lower-income households.
The NYPA plans by 2030 to end fossil-fuel electricity generation at smaller natural gas plants that operate only during high demand. The utility says it will consider using those sites to host renewable energy assets, including energy storage.
Konrad believes the state would realize savings because, like a municipality, a state-owned utility does not pay federal taxes. Municipal bonds would also come at a lower interest rate — a combination he says could save up to 10 percent.
But the most significant savings — and a key selling point for the proposal — would be the elimination of what Shrestha calls Central Hudson’s “profit motive.” Utilities don’t make money on the electricity and gas they provide, but from the delivery rates. That money funds operations, capital projects and returns for shareholders. The Public Service Commission is weighing a request from Central Hudson to increase its delivery charges to provide a 9.5 percent investor return.
According to Joe Jenkins, Central Hudson’s director of media relations, about half of the utility’s capital expansion is covered by borrowed money (through bonds repaid by customers via delivery rates) and half by shareholders. For that reason, Konrad argues, customers are “renting the electric grid from Central Hudson. As renters, we pay Fortis for its cost of capital, plus profit on the amount of equity they put in, plus any maintenance. We have to pay for everything they pay for, plus a profit.”
Konrad estimates that eliminating the need to earn a profit for shareholders could save nearly $50 million annually. He points to data collected by the U.S. Energy Information Administration in 2022, which showed that, on average, public power customers pay 6.3 percent less than customers of investor-owned utilities.
Opposition emerges
“Central Hudson is not for sale,” says Jenkins. If New York State attempts to acquire the company through eminent domain, he predicts “a pretty costly and drawn-out legal battle.”
The company’s objections to the proposal are many. For one, Jenkins said, the utility contributes $60 million in taxes annually to municipalities in its territory. “That’s money that goes to fire departments, school districts, police departments,” he said, cautioning that, for those municipalities, a state takeover would “throw budgeting into chaos.”
Central Hudson also fears a public utility would eliminate hundreds of jobs in the natural gas sector. Jenkins noted that the bill refers to the Hudson Valley Power Authority making an agreement with a union that represents “transitioning employees from non-renewable generation facilities” before the authority completes a renewable-energy project. “We take that to mean natural gas” employees, said Jenkins.
Hochul Proposes Public Nuclear Plant
By Brian PJ Cronin
Last month, Gov. Kathy Hochul visited the Robert Moses Niagara Power Plant to announce plans for a nuclear power plant built by the New York Power Authority (NYPA) to produce at least 1 gigawatt of energy, enough to power about 1 million homes.
“To power New York’s future, we need three things: reliability, affordability and sustainability,” she said. “Nuclear drives all three.”
“There’s strong support among both Democrats and Republicans for nuclear at the federal level,” said Keith Schue of the policy group Nuclear New York. “You can’t really say that about anything else.”
While visiting the Robert Moses plant on June 23, Gov. Kathy Hochul said she would direct the NYPA to develop and construct a nuclear power plant upstate. (Photo by Darren McGee/Governor’s Office)
New York has been deactivating power plants faster than it has been connecting new ones. Indian Point near Peekskill was shut down in 2021; the company that ran it said it couldn’t compete with cheap fracked natural gas flowing in from Pennsylvania. While the state acknowledged that the closure would mean an increased reliance on fossil fuels, it expected that reliance to be temporary as hundreds of renewable energy projects awaited approval.
But the reliance on oil and gas has continued. The pace of adding renewable sources was slowed by supply chain issues, inflation, global interest rates and tariffs from President Donald Trump’s first term. Subsidies and policies for renewable energy equipment in the 2022 Inflation Reduction Act were eliminated by Trump in a budget bill enacted on July 4.
The fossil fuel industry isn’t immune to the same concerns; there’s a five-year wait for natural-gas turbines. However, with high-tech manufacturing plants and data centers emerging upstate — industries that require a substantial amount of power — and renewable energy sources being curtailed, nuclear power may need to play a larger role.
“Upstate New York gets 90 percent of its electricity from clean sources because of what’s going on here [hydro] and nuclear facilities,” said Hochul. “But we need to scale it up fast.”
Fast is not a word associated with the nuclear industry. The country has completed two plants in 30 years: Watts Bar in Tennessee, which began construction in 1973 and became operational in 1996, and Plant Vogtle in Georgia, which broke ground in 1976 and started producing energy in 1987. (Its fourth and final reactor went online in 2024.) Both projects went considerably over budget.
There may be a role for nuclear power in New York, said Alexander Patterson of the advocacy group Public Power NY. But renewable energy is cheaper and quicker to build. In 2023, Hochul enacted the Build Public Renewables Act, which gave the NYPA the authority to bring clean energy online quickly.
Hochul has found an unlikely ally in President Trump. In May, he signed executive orders designed to quadruple the nuclear power generated by 2050 by rolling back federal safety and security regulations and increasing the allowable amount of radiation exposure. This week, Politico reported that the Nuclear Regulatory Commission has been instructed to “rubber-stamp” any projects the Trump administration submits.
Jerry Nappi, the director of public affairs for Central Hudson, says the HVPA narrative suggests that “if the government just had control of Central Hudson, we could do X, Y and Z. But that ignores the fact that we are regulated very heavily by New York State.”
Nappi disputes Shrestha’s statement that a “perverse incentive” for profit is the company’s primary motivator, and Jenkins says Central Hudson recognizes “the growing concern about the affordability of energy.”
“We’re committed to doing everything in our power to keep our bills as manageable for our customers as we can,” said Jenkins. Instead of a takeover, collaborative dialogue with elected officials in the region “is a very important part of reaching long-term, permanent solutions to keep energy bills low,” he said. “It takes a village to keep energy costs low.”
In April, more than two dozen labor and business organizations, including the Orange, Ulster and Dutchess County chambers of commerce, signed a letter opposing a Hudson Valley Power Authority. The legislation, the groups said, “poses significant risks to our local economy and workforce, harms customers and communities, hinders the transition to cleaner energy and threatens the overall reliability and affordability of energy” in the Central Hudson service territory.
While HVPA advocates accuse Central Hudson of profiting from capital expansion, the labor and business groups say public power authorities lack oversight and “are not incentivized to make needed investments, potentially leading to a diminishment of reliability.”
There are more than 2,000 public power utilities in the U.S. and its territories, according to the American Public Power Association.
The groups cite a 2024 report from the American Public Power Association, which they say demonstrates that electric rates in New York are nearly 10 percent higher for residential customers of government-run utilities.
In Putnam, County Executive Kevin Byrne, a Republican, said he “firmly opposes” the HVPA. While its goals of cleaner energy and local control sound appealing, the financial model “relies on high upfront capital costs and long-term debt, which places significant financial risk on taxpayers,” he said. “The idea that this will result in lower rates is speculative at best.”
Steve Carroll, the president of IBEW 320, the electrical workers’ union, says that by focusing their public-information campaign on customers’ unhappiness with Central Hudson’s widespread billing issues, Hinchey and Shrestha have tried to oversimplify the issue. He, too, believes that municipalities would suffer a loss of tax revenue, while the cost of transitioning to renewable energy sources will make it impossible to lower rates.
Carroll likens the impact of the state’s climate goals, which call for the expansion of the electric grid and the elimination of energy derived from fossil fuels, on Central Hudson’s rates to a deli that must charge more for an egg sandwich because the cost of eggs went up. “You wouldn’t blame the deli,” he said.
If New York State’s goal is affordable energy, it should invest in generation, he said, while being “thoughtful” about climate goals and their effect on rates. “The best way to fix that is to produce your own energy, so you control the cost,” Carroll said. “I’m not saying that something doesn’t need to change, but the HVPA isn’t the change that needs to happen. This is a small move, but it has tentacles that will affect a lot of things.”
Grassroots support
Talk to advocates for the Hudson Valley Power Authority and you’ll hear almost the exact opposite.
The bill states that the HVPA will make payments in lieu of taxes to municipalities and school districts to compensate for the amount that Central Hudson pays. “When Central Hudson talks about local taxes, they are ignoring the fact that the HVPA will still be paying this money to local authorities,” Konrad said. “They are trying to scare you.”
Joe O’Brien-Applegate, a Beacon resident who is leading Beacon Climate Action Now’s advocacy for the public authority, says the discussions he’s had at events such as the city’s Earth Day celebration or the Taproots Festival in the fall have been “the easiest political outreach I’ve ever done.”
Beacon Climate Action Now is part of the Hudson Valley for Public Power coalition. O’Brien-Applegate believes residents of the region are not only deeply dissatisfied with Central Hudson, but that there’s growing enthusiasm for a cleaner, more affordable approach to energy.
“Better alternatives to the status quo are out there,” he said. “Things don’t have to be predatory, win-or-lose, zero-sum situations. You can restructure large institutions that put the needs of the people they serve first.”
The Overlooked Renewable
By Michael Turton
Wind and solar receive considerable attention, but another renewable energy source is often overlooked: hydroelectric power. It made its debut in England in 1878, lighting a single lamp, but within 20 years, the world’s largest hydroelectric plant was operating at Niagara Falls.
With more than 300 plants, New York is the largest producer of hydroelectric power east of the Mississippi River and the third-largest nationally, behind Washington and California. The Robert Moses Power Plant, located just downstream from Niagara Falls in Lewiston, features 13 turbines that produce up to 2.4 million kilowatts of electricity, enough to power nearly 2 million homes.
The Robert Moses Niagara Power Plant in Lewiston (Associated Press)
Most of New York’s hydro plants are in the northern part of the state, but smaller installations are found in the south, as well. Central Hudson operates three hydroelectric plants in Ulster County. While not Niagara Falls, the Sturgeon Pool, Dashville and High Falls plants collectively produce 23 megawatts, or 80,000 megawatt-hours of electricity, enough to serve 10,000 homes.
Other hydroelectric plants in the Mid-Hudson Valley include facilities in Beacon and Wappingers Falls in Dutchess County; Walden, Highland Falls and Salisbury Mills in Orange County; and Wallkill in Ulster County.
The New York Independent System Operator, which manages the grid, reported that in 2024, gas and oil-fueled plants produced 41 percent of New York’s electricity while hydroelectric and nuclear plants contributed 21 percent each. Hydro produced 27,936 gigawatt-hours and nuclear 27,073. Wind produced five percent of the state’s electricity, and solar less than 1 percent.
Ulster County Executive Jen Metzger, a Democrat, is on board; last year, she said: “If there was ever a time to consider an alternative to the current model of utility service, it is now.” The Kingston Common Council and the Village of New Paltz Board of Trustees this year adopted resolutions in support of the HVPA. Beacon Climate Action Now says it’s had conversations with the city’s Conservation Advisory Committee about municipal support here.
On Thursday (July 17), Shrestha announced six town halls to be held in Dutchess and Ulster in August to discuss the proposal.
If a public power authority is established in the Hudson Valley, the American Public Power Association, which advocates for more than 2,000 municipal utilities nationwide, suggests that it invest in distribution. Most public utilities purchase power from an outside source, but reliable delivery should be the utility’s only priority, says Ursula Schryver, a senior vice president. That means ensuring that wires, poles and other infrastructure are maintained and upgraded.
The utility should also invest in the community, she said, which could mean providing free electricity to municipal buildings, offering staff for safety workshops, or sharing services such as information technology or billing with other municipal utilities.
In the for-profit model, some of a utility’s revenue is “being pulled away by shareholders,” Schryver said. “All of it is not going back to the community.”
Next steps
If the Legislature approves the measure in two or three years, as Shrestha predicts, whoever is in the governor’s office will need to be amenable to the plan. (The next election for governor is in 2026.) Advocates recognize the need for an independent study to determine the extent to which the proposal would reduce customers’ bills.
Dutchess County Executive Sue Serino, a Republican, noted this week that the state has the power to hold utility companies accountable through the Public Service Commission, “yet we continue to see rate hikes approved time and time again. We need stronger oversight and real accountability now, and any new proposal should come with clear, concrete guarantees that it will truly deliver the savings and reliability people deserve.”
If the legislation to create a Hudson Valley Power Authority is enacted, Shrestha expects Central Hudson will go to court. “We will win,” she said. “It will just be a matter of time.”
Jeff Simms has covered Beacon for The Current since 2015. He studied journalism at Appalachian State University in Boone, North Carolina. From there he worked as a reporter for the tri-weekly Watauga Democrat in Boone and the daily Carroll County Times in Westminster, Maryland, before transitioning into nonprofit communications in Washington, D.C., and New York City. He can be reached at [email protected].
