In response to the countless overhead wires downed by Hurricane Sandy, the City Council last week ordered a study of the idea of burying electric power lines underground. If the project ends up a go, we know just who Council Speaker Chris Quinn would have pick up the tab: somebody else.
Somebody, that is, other than those who’ll be using the electricity.
That was surely the logic behind the missive Quinn fired off to Con Ed a few days earlier, in which she demanded that it shore up parts of its post-Sandy infrastructure — without raising rates.
“Many New Yorkers are still recovering from the effects of Hurricane Sandy,” Quinn wrote. “For a private company that New York City relies on for vital services to propose a rate increase now is a burden on city residents and an impediment to the recovery process.”
Whom would Quinn have foot the bill for Con Ed infrastructure work if not the people who use its service? You guessed it: somebody else.
Quinn was writing in response to the utility’s request for a wholly reasonable 3.4% rate hike. The increase, one of the smallest in years, would generate some $400 million next year and go mainly to improving infrastructure. Con Ed envisions outlays of some $1 billion for upgrades to help safeguard the system against future Sandys.
It’s also worth remembering that the utility was slated to petition officials for a routine increase nearly eight months ago, reflecting its own higher bills. It held off until new infrastructure costs imposed by Sandy’s damage made it impossible to delay any longer.
As a regulated utility, Con Ed has to adhere to a simple formula: costs plus 8%. Quinn may claim that shareholders and investors can make do with less than 8% — but if they don’t see an adequate return on investment, they’ll simply park their money somewhere else. And without their cash, how would Con Ed finance repairs?
This simple concept explains why the state’s Public Service Commission generally OKs hikes for the utility. Bottom line: Higher costs equals higher rates for customers.
By the way, guess who’s helping to drive up those costs? Right again: folks like Quinn and her fellow pols, who impose (hidden) city and state taxes on electric use that account for as much 25% of the average New Yorker’s Con Ed bill.
No doubt Quinn knows all this. But as the mayoral race grows near, she’s like so many of the candidates: in full pander mode.
Big mistake. If Quinn wants to impress voters, she might look to demonstrate her command of the financing process — and tell ratepayers straight out that if they want a storm-proof energy grid, they’ll have to pay for it.
Because there is no “somebody else.”