National Fuel Gas Co. is seeking its first rate increase since 2007, but some of the utility’s low-income customers say they can’t afford it.
“We say no to a rate hike,” said Denise Barr, a resident of Buffalo’s Fruit Belt neighborhood, before a public hearing Tuesday night in Amherst Town Hall.
The Amherst-based utility announced in late April it is seeking a 7.2 percent increase in its delivery rates in a proposal that would raise an average residential customer’s bill by about $5.75 a month.
National Fuel said it needs the increase to speed up its program to replace aging steel and iron pipes that are prone to leak and upgrade its computer systems. The plan would increase the amount that an average residential customer pays to have natural gas delivered to a home or apartment by roughly $69 a year – from an average of about $80 a month to about $86.
But Barr and others who rallied against the proposed rate hike currently before the state Public Service Commission said any increase would disproportionately affect low-income customers.
“You shouldn’t have to choose between having heat and having food or medicine for your children,” said Richard Berkeley, executive director of the Public Utility Law Project. “You shouldn’t have to choose between having heat, and paying your rent or paying your mortgage.”
Members of People United for Sustainable Housing (PUSH Buffalo) also questioned why the commission held hearings on the proposed rate increase in suburban Amherst, but has not scheduled any in Buffalo.
Maxine Murphy, PUSH’s board president, said the location for Tuesday’s hearings was inaccessible and inconvenient for many city residents.
“They want it to be in the inner city, where they can have access to it,” she said.
In its filing, National Fuel said a rate increase will allow the company to provide enhanced low-income customer programs and continue area economic development and possible gas expansion initiatives, according to the commission.
During an earlier public hearing Tuesday afternoon, Karen L. Merkel, a National Fuel spokeswoman, said the average customer’s heating costs over the last seven winters were 34 percent lower than the $1,065 annually paid from 2005 to 2008.
“It’s a good time to heat with natural gas,” she said.
The hearings came on the same day The Partnership for the Public Good released a study titled “Energy Poverty in Buffalo’s West Side: PUSH, National Fuel, and the Fight for Equitable Energy Access.”
“This report offers some important context for today’s discussion,” said Sam Magavern, the Partnership’s co-director. “It talks about the energy poverty that afflicts low-income customers in the Buffalo region. It’s a toxic combination of old, poorly repaired, uninsulated housing and high energy bills.”
The proposed rate hike would not take effect until April 2017. It would generate an additional $41.7 million in revenue a year from all types of customers, raising overall revenues for National Fuel by 7.9 percent. But Magavern and others questioned the need for it.
“We agree that rate payers should be skeptical of a rate increase when National Fuel paid out over $130 million in dividends in 2015 and paid its CEO over $4.3 million,” he said.
Magavern said New York’s energy policy should reflect two imperatives: “leaving fossil fuels in the ground” to avoid climate change; and increasing “energy democracy and equity.”
“People of low incomes contribute the least to climate change and air pollution but they bear the worst burdens from high energy bills and bad air quality,” Magavern said. “New York stands at a crossroads. We need to choose sustainability and equity over extraction and injustice.”