Schumer $hocking 'gougers'
The Post reported that following the announcement of Governor Cuomo's proposal regarding tax abatements for power companies, Senator Schumer has sent a letter to energy companies around the state asking "why the firms believe their tax breaks are in danger and how much of their windfall would go to stockholders. " I have also written similar legislation to the Governor's bill.
Sen. Chuck Schumer yesterday posed four tough questions to operators of the state's private power generating plants -- as consumers and politicians battle shocking rate increases the companies are planning for this summer.
The furious political leaders want to reverse a boost of 12 to 14 percent for New York City residents authorized by the asleep-at-the-switch Federal Energy Regulatory Commission, which ignored big property-tax breaks that some of the firms get.
"These power companies owe New Yorkers clear and unambiguous answers why, on top of massive tax breaks, they also need massive rate hikes that will sock energy consumers," Schumer told The Post.
The questions went to energy firms around the state, including publicly traded NRG Energy and TransCanada, and privately run Astoria Generating Company, all of which have facilities in the five boroughs.
"While I realize that there are legitimate costs that need to be considered when building new generation facilities in the city, I think it is unconscionable for generators to go before FERC and argue for rates that amount to winning the lottery," Schumer wrote.
When FERC sets rates, it factors in the generators' existing and future costs.
It made its decision on two assumptions:
* That power plants are charged city property taxes.
* Or if the companies have tax abatements, they can lose them.
But many plants are exempt from the taxes.
And even though the city in 2008 deemed the breaks "discretionary," it made no move to revoke them.
The generating plants supply electricity to transmission companies like Con Ed, which then pass on increases to their customers.
FERC resets its rates every three years.
And this year the industry saw its chance. Citing a 2008 change in tax policy, it unleashed its lobbyists, who did their job so well that they bragged they got even more than they thought they would.
Schumer wants to know why the firms believe their tax breaks are in danger and how much of their windfall would go to stockholders.
Schumer's letter came a day after Gov. Cuomo proposed his own legislation to address the FERC ruling -- which calculated the plants' bonanza at $500 million.
Cuomo's proposal would guarantee certain of the property-tax abatements, removing the industry's arguments that it needs the high rates in case the plug is pulled on them.
State Sen. Michael Gianaris (D-Queens) has also introduced legislation to address the potential rate spike.
Read the full article here.
Friday, April 15, 2011 - 00:00