Freeport’s electricity utility continues to be in the red after the state Public Service Commission denied a rehearing of the utility’s request for a rate increase in November, Freeport officials said in a lawsuit filed against the PSC in State Supreme Court in Albany seeking to reverse the ruling.
In the suit, filed on Nov. 3, the village alleges that a PSC commissioner objected, for political purposes, to a 4.56 percent rate hike that the village sought to help cover costs related to Superstorm Sandy and the coronavirus pandemic.
The rate increase would have brought in more than $1 million for the electricity utility and cost taxpayers $3 more a month.
The PSC not only denied the rate hike, but it also ordered the village’s power plant PILOT, or tax-equivalency payment, to be reduced by more than half, cutting the value from $3.6 million to $1.4 million.
The tax-equivalency payment had not changed for more than 14 years.
“We had worked out all the nuts and bolts with PSC, like we have for years,” Village Attorney Howard Colton said. “But we learned that one of the commissioners had personal issues with the village, and then the problems started.”
PSC officials denied any wrongdoing, and said the decision to reject the rate hike came as a result of the village’s inability to correct an issue with its calculations of the electricity utility’s payments in 2014.
Colton refuted the PSC’s response, noting that he worked on the village’s justifications for its tax-equivalency payments after the 2014 incident.
When the village submitted its explanation and calculations in 2020, Colton said, the PSC staff and village officials negotiated a rate and tax-equivalency payment that they all agreed on.
As village officials waited for final approval from the PSC commissioners, they were asked to halt all rate plans because of the economic impacts of the Covid-19 pandemic, Colton said. The village agreed. But when it was time to reconvene, Colton said the PSC denied the previously agreed-upon plan.
The village alleges that one of the commissioners was behind the denial. Colton said it was Tracey Edwards, the Long Island NAACP’s regional director.
Colton said that Edwards had wanted to meet with village officials after Akbar Rogers, a Black man, was arrested and beaten by seven white police officers in Freeport in 2019. Because of the pending investigation and lawsuits surrounding the case, the village turned Edwards down.
In the suit, the village alleges that the rate proceedings were “tainted by one commissioner’s bias.” It goes on to include an incident in which Edwards had allegedly reached out to a local state senator to push back against the proposed rate increase.
In a statement, Edwards said, “I recused myself from this action, and I was not on the Public Service Commission in 2014” when the PSC had asked Freeport to fix its calculations. “Further,” Edwards added, “I have been an advocate and reformer for justice and fairness my entire career and will never waver. I look forward to continuing to protect the interests of ratepayers and other stakeholders as a public service commissioner.”
As communications broke down between the village and PSC, Colton said that the PSC staff that village officials had worked amicably with was no longer allowed to speak with them on the issue. Despite 14 years of leaving the tax-equivalency payment alone, the PSC came up with different calculations to change it four times, Colton said.
“They have not had one consistent methodology for determining our PILOT,” Colton said. “We justified our rate, but they keep changing the rules. We’re showing them that two plus two equals four, and they come back and tell us it actually equals six.”
As the case continues in the state Supreme Court in Albany, Colton said PSC’s decision would continue to hurt the village’s already ailing electricity department. Going forward without the needed rate hike means the village will have to continue bailing out the utility.