Officials call Con Ed $9 million penalty insufficient

Although some of the most serious outages involving Con Ed occurred in Manhattan and the Bronx last year forcing Con Ed to return $9 million in profits, many Queens lawmakers were quick to repudiate the penalty as too small of a price for the utility giant to pay for their failures. The ruling, which the state’s Public Service Commission (PSC) issued recently, decreed that Con Ed did not meet reliability standards in 2007, and must return the $9 million to customers.
However, those refunds will not go directly into the pockets of Con Ed customers, but instead be taken off future rate hikes - something that has drawn the ire of a number of city officials.
“This is another example of a greedy corporation [placing] priority on their exorbitant salaries and stockholder dividends rather than doing the right thing,” said City Councilmember Leroy Comrie, who is the Chair of the Council’s Consumer Affairs Committee. “It is the very reason why our nation is in the midst of an economic recession.”
Comrie likened the PSC’s ruling to homeowners across Queens and the city sending an IOU to Con Ed with their next bill statement, and telling Con Ed they would make the payment contingent on getting a raise from their employer.
Con Ed said that it accepted the PSC’s ruling and attributed a large number of blackouts and power failures in 2007 to severe storms throughout the area.
Meanwhile, Queens Assemblymember Michael Gianaris, who has been one of the harshest critics of Con Ed since a 2006 blackout enveloped the western Queens community he represents, renewed his calls for changes within the utility giant and opening up the market to more competition.
“For an unaccountable monopoly that paid its CEO $5.5 million last year, this so-called penalty is a drop in the bucket,” Gianaris said. “If we hope to avoid similar disasters in the future, we must get more serious about reforming Con Edison.”
Comrie expressed similar sentiments calling for deregulation and increased competition or even a government takeover.
“There is a need for reform in the energy service industry, and until that takes place, New Yorkers should continue to expect soaring bills and declining service as long as Con Edison is ‘on it’,” Comrie said.