Assemblyman Sean M. Ryan and PUSH Buffalo are calling on the state Public Service Commission to set aside $40 million in what they describe as National Fuel Gas Co.’s excess profits to fund weatherization programs for low-income residents and provide rebates for the utility’s customers.
But the funds that Ryan and PUSH Buffalo are seeking would depend on the PSC recapturing money that National Fuel earned during its previous rate agreement – a path that the commission is not currently pursuing but has the legal authority to do.
The PSC included a provision to recapture what it determines to be excessive profits in the temporary rates that it set for the company in June, but National Fuel has challenged the commission’s legal ability to do that, arguing that it violates the company’s constitutional rights. The temporary rates would only allow for the recovery of excess profits earned since June, not the three-year period targeted by Ryan and PUSH Buffalo.
Aaron D. Bartley, PUSH Buffalo’s executive director, said the group’s attorneys believe that the PSC has the legal authority to claw back what the commission determines to be excess profits earned by National Fuel in previous years.
“The lawyers can slug it out, but our position remains that every penny of overcharged funds over the last three years should be either returned to ratepayers or placed in a fund that will allow the region to permanently reduce its cost structure and carbon usage, through weatherization,” he said.
“We have not overcharged our customers,” said Karen L. Merkel, a National Fuel spokeswoman. “We’ve charged our customers the same rates that were approved by the Public Service Commission in 2007.”
Ryan, a Buffalo Democrat, said he believes that National Fuel has been charging local customers too much and that those consumers are entitled to some relief. The assemblyman and PUSH Buffalo said they have asked the PSC to set aside $20 million for refunds to National Fuel’s customers, which would equal about $35 per customer, and another $20 million to fund an expansion of the utility’s program to weatherize the homes of thousands of its poorest customers.
The money for the program would come from recapturing about $10 million in what they said were excess profits during each of the last three years, along with $10 million that has gone unspent in the low-income customer assistance programs administered by National Fuel.
“They should be getting a rebate check in the mail,” Ryan said. “It makes sense. They paid the overcharge.”
Ryan estimated that the $20 million in weatherization funds would pay for long-term improvements that this would significantly reduce natural gas consumption at more than 5,000 of the region’s draftiest and most energy-inefficient homes.
Bartley, who has been battling with National Fuel for several years to expand its low-income energy-efficiency programs, said that those efforts are much more effective than the furnace and water heater rebates that have been a centerpiece of the utility’s Conservation Incentive Program.
“Our position from the get-go has been that rebates are ineffective,” Bartley said.
Merkel said that expanding the scope of the weatherization program would benefit PUSH Buffalo financially. “They are a contractor and recipient in the very programs that Assemblyman Ryan is seeking to have the funds assigned to,” she said.
In June, the PSC imposed a series of temporary rates for the utility that will freeze its delivery charges while the commission conducts a broader review of its rates that could take nearly a year to complete. The PSC said profits at National Fuel’s utility business were so strong during the final years of its rate plan that expired in June that the company may have been overcharging its customers by more than $10 million a year from 2010 to 2012.
National Fuel has countered that its earnings were much less than the PSC says and that its improved profitability is because of efforts to cut costs and become more efficient.