By Nathan Duke
Elected officials at the city, state and federal level blasted a settlement reached last week between Con Edison and borough residents as well as business owners affected by the 2006 western Queens blackout on the grounds that $17 million would not adequately repay ratepayers for suffering through the outage.
Under the settlement, the utility will give $100 to each resident affected by the outage, while small businesses will receive $200 and large businesses will get $350. The utility had previously paid more than $12 million in compensation following the outage.
Con Ed will also swallow another $46 million in repair costs stemming from the outage rather than charge ratepayers as part of a settlement reached last week among the utility, borough residents and merchants.
The blackout left an estimated 174,000 residents without power for 10 days in July 2006 and caused borough businesses to lose millions of dollars in revenue.
U.S. Sen. Hillary Clinton (D-N.Y.) said the settlement, filed last Thursday with the state's Public Service Commission, would be “inadequate” for businesses damaged by the outage.
“The offer made by Con Ed is unacceptable,” she said. “The power outage impacted so many people and resulted in serious financial and personal losses.”
City Councilman Peter Vallone Jr. (D-Astoria) also said Con Ed should better reimburse businesses for their losses.
“It is a disgrace to pay businesses barely a dollar an hour for the disaster Con Ed inflicted on our neighborhood,” he said. “Every penny that these businesses lost should be fully reimbursed because of Con Ed's negligence and lies.”
State Assemblyman Michael Gianaris (D-Astoria) said the reimbursement would also not go very far for residents who were without power for 10 days.
“Con Edison stretches the bounds of insulting behavior with each passing day,” he said. “[Con Ed CEO] Kevin Burke earned $100 for every two minutes and 11 seconds that he presided over this failing company last year, and yet this is what they are offering for a week and a half of pain and suffering. Until Con Edison is dramatically reformed, nothing will change and we will relive these disasters year after year. Enough is enough already.”
As part of the settlement, the utility will also pay an estimated $46 million in repairs caused by the blackout rather than including the costs in ratepayers' bills, a Con Ed spokesman said.
The utility will also pay $500,000 for study of the blackout's impact, the spokesman said.
In a statement, Con Ed said its leaders were pleased that a mutual agreement was reached between the utility and parties representing the affected businesses and residents.
“Con Edison sincerely regrets the July 2006 Long Island City network power outage and its consequences,” the statement read. “Our performance during the event did not meet the standards we set for ourselves nor the expectations of our customers. We regret the extended hardships experienced by many residents and businesses as a result of the outage.”
The PSC voted unanimously in April 2007 to investigate the utility's response to the blackout. Con Ed had asked the PSC to consider a possible settlement earlier this year.
Con Ed raised its rates 4.7 percent on April 1 following the PSC's approving part of the utility's proposed rate hike. The utility had proposed increasing bills by as much as 36 percent, making it the largest rate hike in the company's history. But the PSC approved a more modest $425 million increase that would increase bills by 4.7 percent for one year.
Reach reporter Nathan Duke by e-mail at news@timesledger.com or by phone at 718-229-0300, Ext. 156.
