Riley sues state agency to overturn Central Hudson rate hike

COLUMBIA COUNTY―U.S. Representative Josh Riley (D-NY-19) is suing the New York State Public Service Commission (PSC), alleging the agency acted against the interests of utility customers when it approved the latest Central Hudson Gas & Electric Corp. multi-year rate increase.

Riley, who filed the Article 78 lawsuit on Friday in State Supreme Court in Columbia County, is seeking to overturn the PSC’s August 2025 order that gave Central Hudson the green light to raise electric and gas delivery rates.

Under the plan, the average residential electric customer―who uses 630 kilowatt hours of electricity each month―will see their bill go up $5.43 per month for the first rate year. In year two, the monthly increase would be about $6.25, then approximately $6.62 per month in the final year.

Riley is also asking the court to require Central Hudson to refund ratepayers the difference between what they have paid since the order took effect on September 1 and what they would have paid if the PSC had denied the rate hike request.

“Upstate New Yorkers are being crushed under the weight of high utility bills. Meanwhile, the utility monopolies are making massive profits, which they are sending to their foreign parent corporations,” Riley stated in the lawsuit.

Central Hudson maintains that the rate increase allows them “to make essential upgrades that will enhance the reliability of the region’s energy infrastructure and reinforce cybersecurity protections against evolving threats.”

“We’ve spent more than a year working with our regulators and other interested stakeholders to arrive at a financially responsible plan that allows us to make the investments required to power our customers lives, protect their data and their energy system and do it all with minimal impacts to customers’ bills,” Central Hudson President and CEO Steph Raymond said following the PSC’s approval of the new rate plan.

But according to Riley, the PSC failed to conduct an analysis of the dividends Central Hudson has paid to its Canadian parent company Fortis.

“…no analysis of Fortis’ earned surplus or profits, no analysis of the relationship between the rate base and Fortis’ earnings, no analysis of the value of the stock Fortis holds in Central Hudson, no analysis of the relationship between utility rates and Fortis’ profits. Nothing,” Riley stated in the lawsuit.

“At no point did the PSC assess, much less decide, whether a fair balance has been struck where Central Hudson customers are reporting serious affordability concerns while Central Hudson is providing Fortis with about $100 million per year in profits,” he continued, contending that the law requires investor interests to be considered in rate cases.

According to Riley, the PSC cited what is known as “ring-fencing,” a regulatory mechanism that structurally and financially separates a utility’s regulated operations from its parent company, and in doing so, the PSC stated that “no further in-depth review of the upstream ownership of company is required to adopt a rate plan for the company at this time.”

“As far as I am aware, there is simply no legal authority for that proposition―not in any statute enacted by the Legislature, not in case law from the courts, not in any rules or guidance from the regulators, not anywhere,” Riley argued.

He also alleges that the PSC contradicted language in its previous 2013 approval of Fortis’ acquisition of Central Hudson. At that time, Riley said, the PSC explained that scrutinizing Fortis’ “books and records is vital to ensuring ratepayers are protected.”

“Fortis’ financial records cannot simultaneously be ‘vital’ in determining whether Central Hudson’s rates are just and reasonable―as the acquisition order said―and also ‘completely irrelevant’ in determining whether Central Hudson’s rates are just and reasonable,” he stated in the lawsuit.

According to Central Hudson, since Fortis acquired the company it has invested more than $720 million into strengthening and modernizing Hudson Valley energy infrastructure. The utility also says that from 2017 to 2024, it did not contribute any funds toward Fortis’ shareholder dividends.

On Thursday, executives from Central Hudson met with Riley in Washington, D.C. to discuss long-term strategies toward stabilizing customer bills.

Riley, who is also an attorney, represents New York’s 19th District that stretches from the Hudson Valley to the Finger Lakes. Central Hudson serves around 100,000 of his constituents in Ulster, Columbia, Greene and Sullivan counties.