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Mayor On Electric Rate Hike: 'It Will Not Happen Again'

The mayor said the problem had been identified and corrected.

Mayor On Electric Rate Hike: 'It Will Not Happen Again'
After months of public outcry, Greenport Village Mayor David Nyce faced the public Monday to explain a recent electric rate hike that had residents seeing red.

Nyce said he needed to address the village's electric customers. In going over over the billing, Nyce said customers were "mis-billed" for the month of October in a bill they received in December. 

The mayor then went on to explain how he said the snafu happened, and left village ratepayers holding the bag for a hefty $108,000 penalty.

According to Nyce, last year, the village entered a contract with the New York Power Authority to purchase transmission congestion charges (TCC) at a fixed rate, that had to be paid in advance.

In Feb. 2013, the village paid 25 percent; the balance was due in October, Nyce said, at which point Nyce said he asked NYPA if the charges could be rolled into the rate. NYPA, Nyce said, first agreed, then said no.

The mayor then said Jack Naylor, former village utilities director, told him that a required test at the village's power plant had not been performed last spring, due to ongoing capital improvements.

Last spring and early summer, Nyce said the village had discussions with NYPA about recouping TCC charges through the purchased power adjustment portion of customers' electric bills.

A memorandum of understanding was signed in October, Nyce said, with conditions, including the requirement that the village have a twice yearly audit of its electric fund, and an agreement to a mid-year report.

NYPA, Nyce said, asked about the missed test and said penalties would be added.

"We tried to determine if this was the entire fault of the village, of NYPA, of the New York Independent System Operator, to see where the blame lies," Nyce said.

While Nyce charged that NYPA's "assistance" was questionable and "their information was less than forthcoming or helpful," there was no direct way for the village "to put the entire blame on NYPA" or anyone else, he said. "The fault for that test being missed lies with the Village of Greenport," Nyce said.

Due to the test having been missed, there was a penalty to the tune of $108,000, Nyce said. "That is extremely unfortunate," he said, but added that village rate payers see the benefit of passing the test normally.

Nyce said the village "would have to take some blame" because the money the village was taking from TCC charges should have been amortized over 24 months and instead, a 12-month formula was used.

October was also the last month for which the village was receiving wheeling charges from Con Edison, Nyce said.

The problem, Nyce said, has been found and identified, with a plan in place moving forward.

"Next month's bill will show a correction in our bill to account for over-billing in October," Nyce said. "You will see a reduction in your bill and we will be back to the basic collection of TCCs."

Reflecting on the situation, Nyce said, "I can't express enough my dismay at having missed the test. Nothing would make me happier at this time than to tee off the former director of utilities but that won't change anything."

He added, "This was a one-time thing. It will not happen again."

Sparks flew as some residents questioned the mayor's explanation.

Resident Bill Swiskey told the mayor he'd seen a "lot of blame being thrown around" during Nyce's explanation. "It's your fault," he said. "It's the fault of the five people sitting at that table, that's whose fault it is."

Swiskey said he'd been asking about the situation at the power plant for 18 months but had always been told that everything was fine.

"Your response was, 'Mr. Swiskey, you don't know what you're talking about,'" he said to Nyce. "Why do we have to pay for the $108,000?"

Nyce said the day the test was run, a switch gear didn't work.

Swiskey countered he'd had much experience in the area.

"We're fixing what you did," Nyce said.

"Now it's my fault? That's the smallest statement I've ever heard," Swiskey said.

Nyce said NYPA had been informed that the gear had been taken out of service for repair and would be back in two weeks; the village, he added, was entitled to upgrade equipment and that could not be done unless it was taken out of service.

"I don't like being lied to," Swiskey said.

"The fact that you don't like the explanation does not make it incorrect," Nyce said. "You haven't gotten the answer you want to hear."

"I can't handle this anymore," Swiskey said, and left the podium.

Resident John Saladino said in perusing pages of emails that had been obtained from NYPA with a Freedom of Information Act request, he noticed that emails from Naylor to NYPA and vice versa had been copied to Nyce, but not village trustees.

"To hear you say that it's basically on Jack Naylor's shoulders, while I'm not here to be his advocate, I find that less than accurate, less than truthful," he said.

During a former work session, Saladino said it had been revealed that the design of the system by the engineer revealed that an "obsolete" switch gear had been used; he added that some of the emails had indicated that the engine did not run and that's why tests could not be performed.

"If, in fact, the system had a design flaw, why is it that I'm responsible for the penalty?" Saladino asked. "Why did you choose to pass the penalty on to the rate payer, rather than the engineer or the contractor in charge of implementing the system? I don't understand why I should be responsible for this mistake."

He added that Nyce had been aware of the problem in advance.

"Can I have my money back?" Saladino asked.

Nyce said unfortunately, the village had to pass on the charges because the penalty had to be paid.

"Why should the taxpayer bear the burden of poor service?" Saladino asked.

The mayor added that there was no definite way to prove the error was someone else's fault. 

Saladino asked why the issue had not come up sooner at earlier meetings

Over past months, Greenport residents have expressed outrage over electric bills they said spiked even higher than expected.

The bills, said Swiskey, had gone up approximately 80 percent.

"The average bill almost doubled. This is not the $8-10 dollars the mayor forecast," he said.

The contentious bill that was received by village residents, Swiskey said, reflected an uptick in the purchase power adjustment portion of the bill of about 80 percent.

Swiskey has asked Nyce if the rate hike was instituted "illegally."

Swiskey reached out to NYPA for clarification.

He added that the village had not responded properly to village customer complaints.

Swiskey also demanded that NYPA provide an explanation for each charge stated on the NYPA bill to the village dated Oct. 15, "since the Village of Greenport is unable to explain them."

Nyce promised village taxpayers that the increase it would cost the average residential customer no more the $7 to $10 dollars a month, Swiskey said.

"Well, in less than two months in, that cost is almost doubling the average energy charge portion of the average residential electric bill.  The only answer they can provide to my inquiry is, 'The bill is the bill.' I think that the village needs to provide a clear explanation of how this could happen. Every rate payer should withhold payment of this bill until that explanation is forthcoming," Saladino said at the time.

Earlier last year,  the  first notice of an increase on the electric bill had some outraged.

A letter to residents was posted on the Greenport Village website. Dated August 14, 2013, the letter discussed a purchased power adjustment.

"The operations of the Village's electric department have not changed, and the base rates are remaining the same," the letter read. "However, certain long-term transmission contracts will expire on October 31, 2013. Similar contracts, used in the delivery of your purchased power, are more expensive. These contracts are necessary to protect the electric department's customers from the high transmission costs caused by the State's deregulated market for electricity."

The letter went on to say that beginning in August, 2013, the purchase power adjustment would increase in both residential and commercial bills for a 28-month period.

"In an effort to ease the impact on our ratepayers, the end result is a cost 'pass-through' with an expected average monthly billing increase for the next 28 months" of:

$7.75 to $10.69 per month for residential customers and

$25.12 to $39.77 per month for commercial customers.

The letter also stated that the village was continuing to work with the New York Power Authority to identify other options to help ease the burden on electric customers.

The letter had some calling for answers.

Greenport village residents get their electricity, water and wastewater services from a facility on Moores Lane near the high school.

What do you think of Mayor Nyce's explanation of the electric bill increase? Share your thoughts with Patch.

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