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Prevailing Madness

May 31, 2010

 A while back, we wrote about the inability of policymakers in New York to see the cumulative effect of their actions in the energy sector. We noted that New Yorkers pay the highest energy bills in the nation and we described how state taxes and assessments now account for 26 percent of the average energy bill. (See Energy Taxes and You

We need to revisit this issue because state lawmakers are at it again. This time it is not another tax, but a mandate for utilities to pay prevailing wage to contract service workers. 

The State Senate is poised to vote this week on legislation that would require upstate utilities to pay downstate union wage rates, not to their existing workers, which are already unionized for the most part, but to all vendors. That’s everyone who does any work for a utility – janitors, guards, maintenance workers, caterers, etc. 

This is a big kiss for the downstate service worker union, with whom senators are trying to curry favor in an election year, but it’s a poke in the eye to ratepayers across the upstate. 

Fortunately, National Grid has the gumption to fight back. Grid execs always get hammered for rate increases, but a significant portion of the time it’s simply not their fault. It’s the fault of lawmakers in Albany who keep piling on the taxes, assessments and mandates. 

Grid is running ads in upstate markets urging senators to oppose this bill. No doubt there’ll be some people who complain that the company is spending money on the ads, but if the company is successful in blocking the measure it will save ratepayers $18 million annually. 

Grid should be commended for this effort. Other utilities should follow their lead.  This ad campaign may be the only way to wake up the lawmakers. 

It’s interesting to note what else this bill does. It expands the state’s definition of “public agency” to include not only utilities, but state contractors like the McDonalds and Starbucks that operate at Thruway rest stops. Workers at these facilities will now get wage rates of unionized service workers downstate. And the rest us will be paying even more for food and drinks when traveling.

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