Con Edison was once a model of stability. Prior to deregulation of the industry, it delivered electricity at a reasonable rate to millions of New Yorkers. Then, in 1998, as part of a global trend of privatization and deregulation, private investors completed a process of buying out smaller companies and created the nation's largest privately-owned energy company - Consolidated Edison Inc. I felt the effects of this private company this month, when I received an ominous note attached to my monthly bill entitled “New Electric Rates Effective May 1, 2009.”

It seems that the Public Service Commission approved an increase to Con Edison’s electric-delivery service rate. The average New Yorker will now be paying an additional $6 a month, only a year since the last hike of $4.25. These hikes coincide with an approval from Albany for the natural gas delivery company National Grid to raise their monthly rates an average of $6 per customer. New York City residents also face a 40% hike in water rates since 2006 as well as the MTA fare hikes. Between the economic crisis and the various rate hikes, Con Edison’s higher costs could be enough to make thousands of New Yorkers choose between skipping meals and paying their bills.

The commissioner of the Public Service Commission claims to empathize with Con Edison’s customers, “We are always concerned about the impacts on rate payers of any rate increase, but today’s decision is particularly difficult… Unemployment has risen and consumers are having difficulty paying their bills.” But the rate hike does only one thing – increase Con Edison’s revenue to $721 million. Why then would the Public Service Commission endorse such an action?


Part of the answer lies in the current fiscal crises in the State and City. Legislators are dealing with budget deficits by cutting public services desperately needed by working class and poor New Yorkers. Even these sharp cuts have not been enough to fill the budget gap so they have resorted to increasing property taxes, including those on utilities such as Con Edison. This seems like a fair way to shift the burden on those most able to pay, but Con Edison and the Public Service Commission seem to disagree. $239 million of the revenue generated by the rate hike is justified by the Public Service Commission to cover the increased property taxes. This is just another way in which the burden of the economic crisis is shifted to the already over burdened working class and poor.

The latest rate hikes are indicative of a larger pattern of behavior that Con Edison has displayed since deregulation in 1998. The quality of service has decreased, prices have gone up, and the exploitation of Con Edison workers has increased. This is made clear through Con Edison’s attempt to create divisions between workers and consumers by listing employee pensions as a motivation for the rate hike. Last year after intense negotiations, Con Edison was able to win concessions from the Utility Workers Union of America Local 1-2 to reduce employee benefits. In exchange Con Edison agree to allow the employees to keep their traditional pensions and not switch to 401(k)s. Now, the company is trying to pass off even the small gains by the workers onto the customers in the form of rate hikes.

Another aspect of for-profit energy is the declining quality of service. In 2006, Con Edison’s poor service resulted the massive week-long blackout in Queens. The black out particularly affected the sick and elderly. For example, 72-year-old Iris Long was recovering from a triple bypass surgery when the black out hit. She later testified that the black out contributed to chest pain and vocal chord problems: “I felt it was hindering my recovery, ” she said. In 2005, stray voltage killed a woman after she stepped on an electrified plate. In 2007 an 83 year-old steam pipe burst in Midtown resulting in the death of one person and 40 injuries. These are just a few of the extreme examples of the effects of privatization, but the decreased quality of service is evident in Con Edison’s slow response time to everyday complaints and lack of customer service.

Con Edison is a clear example that the mentality of “privatization and deregulation” has to go. Since it consolidated its private monopoly of power distribution, it has not operated in order to provide New Yorker’s with the electricity they need at a reasonable price or to provide its workers with a decent salary and benefits. Instead, Con Edison operates with the good of its shareholders in mind. As a result, New Yorkers are scraping to pay their bills, employees are losing benefits, and the public is being endangered, while executives and stockholders’ wealth is on the rise.

In contrast to the privatization model, Electric companies should be operated as well regulated public utilities with the interest of workers and consumers in mind, NOT in the interests of business executives and stockholders. Revenues above running costs should be returned to the customer and public utilities should be subject to democratic local control by the people affected by their actions.

It seems, however, that this will be long struggle. Con Edison has publicly stated its plans for next year - another $6 rate hike! It should be clear by now that privatization has not delivered the juice for New Yorkers.