New York utilities sue to pass along prolonged-outage costs

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Plaintiffs include Con Edison, National Grid and Orange and Rockland Utilities.

Currently, the commission does allow for utilities to seek a waiver of the law’s requirements, but without an opportunity to pass on costs, the companies argue, their shareholders are on the hook for “potentially unlimited financial obligation.”

A commission spokesperson said the agency does not comment on pending litigation.

State lawmakers and local officials have long panned utilities for prolonged service disruptions after intense storms. Tropical Storm Isaias in 2020 galvanized the Legislature to pass the customer refund law after roughly 1.5 million households across the five boroughs, Long Island and several other counties suffered extended outages.

The Public Utility Law Project of New York, a nonprofit watchdog, pointed to Isias as a wakeup call that the state lacked a uniform process for seeking and awarding reimbursements. The nonprofit generally supported the PSC’s rulemaking as putting customers first.

It maintains that adding a mechanism for utilities to recoup costs goes against the law’s language, spokesman Ian Donaldson said.

“We strongly opposed the addition of a cost-recovery scheme on those grounds,” Donaldson told Crain’s, “and on the basis that it would undermine the objective of [the law], and thus the Legislature’s intent, which is to provide customers with compensation when they experience a widespread, prolonged outage.”



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