Pols say Con Ed settlement shocking

Almost two years after the 10-day Con Ed blackout of about 174,000 people and hundreds of businesses in Long Island City (LIC), Astoria, Sunnyside, Woodside and Hunters Point, the electrical utility has agreed to a $17 million compensation plan for the affected area.
The payback will come as a credit on a future Con Ed bill - $100 for residential customers, $200 for “small commercial” and $350 for “large commercial” users. In addition, Con Ed agreed not to pass the $40 million cost of repairing the damage on to customers, and to absorb the $6 million in “carrying charges” on the repair bill.
The announcement, on Thursday, April 24, was assailed by elected representatives of the affected areas, especially in view of the recent largest-ever electric rate hike and the revelation that the utility’s chairman got a huge raise since the incident.
City Councilmember Eric Gioia, who represents part of the blacked-out area said,
“While the $100 refund is a good start, it in no way covers the losses suffered by the businesses and families of Western Queens or compensates for the difficulties and hardships they endured.”
“It’s outrageous that while they’re giving [Con Ed CEO] Kevin Burke millions a year, this is all they’ll do for the tens of thousands of affected people in Western Queens,” he said.
According to a document filed by the company just days before the settlement was announced, Burke received $5.52 million in salary and perks last year, nearly $800,000 more than in 2006, when the blackout occurred.
In March, regulators approved the one-year $425 million increase in electric rates - the typical New Yorker will pay $4.25 a month more for electricity - although it was a fraction of the $1.2 billion increase that Con Ed had asked for.
Those involved in the negotiations leading up to the announcement struck a more upbeat note.
“This was an unprecedented victory given the limitations of current state law,” said Assemblymember Richard Brodsky, who chairs the committee which oversees Corporations, Authorities and Commissions.
Under current New York law, Con Ed, as a utility company regulated by the Public Service Commission (PSC), Con Ed is governed by a “tariff” that sets terms and conditions under which it operates.
Under the terms of the tariff, Con Ed will provide limited compensation for residential and commercial customers affected by a power failure resulting from malfunctions in the local distribution system “under certain circumstances.”
However, in order to seek compensation for “individual economic or other losses,” claimants would have to demonstrate that “Con Ed acted with gross negligence or willful misconduct.”
Not all of the $17 million is going to customers. Con Ed has agreed to pay up to $500,000 to a research entity for the completion of a study of the impact, including the economic and health impacts, of the July 2006 outages on the affected communities.
In addition, a portion of the money will be paid for the planting of trees in the affected communities, and the remainder of such funds shall be paid to the Greening Project Administrator for other environmental initiatives. Con Ed will also issue an apology to the communities in both English and Spanish.
Astoria’s Councilmember Peter Vallone, Jr. bristled at the settlement, saying, “It is a disgrace to pay businesses barely a dollar an hour for the disaster Con Ed inflicted on our neighborhood, which caused three businesses to close and cost others tens of thousands of dollars.”
He also pointed out that, “customers will be giving that money all back due to the recent rate increase.”
The Commission approved the latest rate increase, pointing out that the modernization and upgrading of the electrical “grid,” without which future outages are a certainty, required it.
In January, the state’s Public Service Commission issued a “withering” report on the blackout calling Con Ed’s performance “inept and grossly negligent” and blamed “its failure to reliably operate, maintain, and manage its system, or to respond effectively to an escalating emergency,” as responsible for the severity of the damage.