Economic Liberties Welcomes New York Senate’s Attention to Utility Rate Reform, Urges Improvements
Washington, D.C. — Following the release of the New York State Senate’s new one-house budget proposal, which includes efforts to rein in excessive utility rates of return (ROR) that lead to higher energy prices, the American Economic Liberties Project released the following statement urging key improvements in the bill.
“The inclusion of this proposal in the New York State Senate’s budget proposal demonstrates growing recognition of the need to address excessive rates of return, which have allowed utility monopolies to extract billions from consumers through inflated energy prices,” said Mark Ellis, Senior Fellow for Utilities at the American Economic Liberties Project. “But without clearer guardrails, the process for setting ROR could be co-opted by utilities, locking in the same flawed financial models that let them overcharge consumers. A standardized methodology is essential, but it must be developed transparently — based on sound, well-established and widely accepted financial principles — and allow for reasonable differences among utilities.”
“If done right, though, this reform could set a national precedent and push other states to ensure utilities charge fair, market-based rates instead of exploiting captive consumers,” Ellis added. “We urge the New York legislature to improve and pass this important measure, and other state legislators to introduce legislation reining in excessive monopoly utility rates of return.”
In a recent whitepaper, Economic Liberties shed light on how investor-owned utilities (IOUs) overcharge ratepayers, offering concrete recommendations to ensure rates are fair and aligned with the public interest. Bills to reform excessive rates of return have also been introduced in New Jersey, Florida, and Rhode Island.
Read “Rate of Return Equals Cost of Capital: A Simple, Fair Formula to Stop Investor-Owned Utilities from Overcharging the Public,” here
Learn more about Economic Liberties here.
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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.