Government Controlled Power is bad for Rochester and bad for customers
In Rochester, where Rochester Gas and Electric (RG&E) has provided safe, reliable electric and gas service to approximately 388,737 electricity customers and 321,651 natural gas customers in a nine-county region for 175 years, calls for a public takeover of the utility have increased steadily over the last year. Peoples’ frustrations with RG&E have been mounting, and those frustrations are warranted. The company’s customers have experienced a slew of billing issues paired with unprecedented wait times when they try to call customer service and get help. As a Rochester native with an extensive background in customer service, a nine-year employee of the company, and most importantly a customer, I take these concerns to heart. But I know for sure that government-controlled power is a bad deal for the people of Rochester, who have not been fully educated on what it would mean for their wallets.
RG&E recognizes its issues, which have been amplified by the pandemic and its subsequent staffing challenges. We have a plan to improve, and we are working tirelessly to execute our plan; results have and will continue to become apparent to our customers. But in the gap between our customers’ frustrations and the company’s fixes, room for a small, but very vocal group of activists to float a seemingly simple alternate narrative was created: the idea that a public-owned utility would be cheaper, more reliable, and the answer to every complaint that can be summoned against our company.
Of course, the truth is not so simple and the proposed “solution,” is no solution at all. The truth is a public-owned utility is actually a government-controlled utility. It would add another vital responsibility for our local government to manage beyond law enforcement, schools, and water infrastructure. Rather than being a cheaper alternative to RG&E, buying out the utility would cost our customers billions of dollars – money that City and Monroe County residents and businesses do not have. Additionally, RG&E pays $165 million annually in taxes. That money is used by local municipalities for infrastructure, public safety, and education. A government-controlled utility would not pay taxes. Government control of a utility does not guarantee lower prices. Case in point: in 1986, the Long Island Lighting Company (LILCO), a private company with private shareholders and bondholders was taken over by the Long Island Power Authority (LIPA). The money borrowed by LIPA to pay LILCO for its assets has led to Long Island ratepayers’ power bills being among the highest in the country. By contrast, RG&E has the second lowest rates in the state of any investor-owned utility, with our sister company NYSEG having the lowest.
Each RG&E bill has two components: supply and delivery. “Supply” refers to the commodity itself. Supply prices reflect the cost of RG&E purchasing from energy producers on the open market. RG&E passes those costs to our customers. We have no control over setting the price of energy and receive zero profit on any increase pushed by the energy producers – it is a pass-through cost. Unfortunately, due to several factors, including the war in Ukraine and generation costs, commodity prices have skyrocketed, which has contributed to customers receiving higher utility bills. RG&E has several programs to help our customers, particularly our most vulnerable ones. This winter, we voluntarily suspended late payment charges and provided $45,036,805 million in relief to residents and businesses who got behind on their bills because of the pandemic. We have widely advertised the array of programs to assist those who need help paying their energy bills, and we strongly encourage our customers to contact us if they need assistance. Additionally, the company invests locally, providing nearly $11.6M in economic development grants to 230 businesses since 2019. Those grants have helped create more than 9,700 new jobs in Rochester. These incentives would go away with a government-run utility.
Those who shout the loudest are often the only voices that are heard. Along with the more than 800 employees who live and work in the Greater Rochester area, I am accustomed to quietly working in the background, missing important life moments to ensure customers have power. In recent years, as extreme weather events have increased dramatically, our entire families have made sacrifices while we serve our “storm roles,” providing a public benefit to our community that often goes unnoticed because we are in the business of providing safe and reliable service – not storytelling. But it’s important to examine the facts and realize that a reactionary measure like government-controlled power will not benefit the people of Rochester as the public is being led to believe.
Studies have found government-owned utilities cost more overall and do not provide the same level of service that our consumers expect. Our workforce is concerned about protecting rate payers – our neighbors – by saying “NO” to public power.
Veronica Dasher is Regional Manager of Government and Community Relations at RG&E .