Schumer Calls For FTC To Look Into Inflated Energy Prices

Area residents concerned about their inflated energy bills this winter have an advocate in Washington.

United States Sen. Charles Schumer is urging the Federal Trade Commission to immediately investigate the increase in electric prices New York residents paid this winter.

“This is a punch in the gut for residents who are already trying to do more with less,” Schumer said. “Electric bills have caused electric sticker shock.”

Utility companies throughout the state have attributed the price increases to record-low temperatures, high demand and high prices for natural gas. According to Schumer, the rate increases were so high that he is concerned it outpaced the actual increase in wholesale energy costs for utilities.

Schumer said there are a number of other potential factors for the increases that will go under investigation, including the possibility that utilities are passing on more of the natural gas cost to consumers than they should be or that natural gas providers are withholding some of their supply in order to drive up prices.

Schumer said National Grid, a company that services Western New York, averaged a price increase of 60-75 percent – the most significant increase of energy companies in the state.

National Grid spokesman Patrick Stella says the utility supports a review of the price increases, which it has blamed on high natural gas demand and a long, cold winter on the East Coast.

Stella says National Grid doesn’t mark-up wholesale electricity costs and that it is working to gradually phase-in the increases to assist customers.

“As the thermostat went down this winter, electric bills shot up. It is typical for electric bills to go up during the winter months, but this year’s sky-high increases are more than what would be expected,” Schumer said. “These bills have gone up so much that we need to take a good, hard look at what is really going on here; and that is why I am calling on the Federal Trade Commission – the authority when it comes to consumer protection and anti-competitive business practices – to launch an investigation into these exorbitant price hikes.”

According to Schumer, time is of the essence in this matter. As energy rates typically increase again in summer months due to increased consumption, if the investigation uncovers any wrongdoing, there will be time for prices to decrease before summer.

According to Schumer, the best way to prevent price inflation is more oversight.

“Sunlight is the best disinfectant,” he said. “We need someone looking out for the best interest of the consumers.”

If the Federal Trade Commission finds any evidence of wrongdoing, the case will be presented to the Department of Justice.

Schumer submitted a letter to the Federal Trade Commission detailing his request for investigation.

This winter, Salamanca residents expressed concern over their increase in electric prices.

Keith King, city Board of Public Utilities manager, said January’s extreme-low temperatures, combined with the highest power rates the city has ever seen, have driven electric bills as high as three times previous prices.

“Everybody is dealing with the high prices,” King said. “January was extremely cold and we, as a city, purchased more power than ever before at prices the highest they have ever been.”

David Leathers, Jamestown Board of Public Utilities general manager, said electric use was up approximately 7 percent in December and 5 percent in January, when compared with last year.

“Most of the increases in consumption are from our residential customers,” he said.

In January, BPU officials reported that the S.A. Carlson Power Plant and the electric distribution system performed well during the polar vortex and saved significant money for all electric customers during the cold spell.

The Associated Press contributed to this article.