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Power giant Con Edison will fork over millions to Western Queens after announcing a proposed settlement in the 2006 blackout case.

Following steady pressure by the Western Queens Power for the People campaign and Assemblyman Richard Brodsky (D-Westchester), Con Ed agreed to a joint proposal that will force the company to pay $63 million for the July 2006 Queens power outage.

An estimated 100,000 people were left without power for up to nine days in Long Island City, Astoria, Sunnyside and Woodside during sweltering July heat-now residents should be getting some relief, and at the least scored a victory going forward against the power monopoly

The joint proposal, announced last Thursday, was negotiated by Con Ed in conjunction with The Department of Public Service staff, The Consumer Protection Board, Western Queens Power for the People and Assemblyman Brodsky.

The joint settlement follows an investigation by the Public Service Commission which found that the outages resulted from Con Ed’s “inept and grossly negligent performance and failure to reliably operate, maintain and manage its system or to respond to effectively to an escalating emergency.”
The largest share of the monies in the joint proposal will provide rate benefits to all customers by disallowing inclusion of some $40 million electric rate base charges stemming from costs incurred by Con Edison to replace and repair electric delivery equipment in the Long Island City Network associated with the July 2006 outages.

Therefore, residents will not be forced to pay for repairs associated with the company’s negligence and neglect related to the blackout.

The company will also not recover $6 million in carrying costs accrued on the $40 million of plant costs. In addition, Con Ed will make available $17 million in community benefit funds that will be used to benefit neighborhoods directly affected by the network outages.
Residential customers can expect a $100 rebate credit on their bill if the settlement is approved by the Public Service Commission.

The $17 million in community funds will be used to provide these bill credits to consumers affected by the outage, accompanied by an apology letter. The money will also fund a study by an independent third party investigating the health and economic impacts of the blackout and provide monies for tree planting and other initiatives to improve the environment in neighborhoods directly affected by the outage.

Some elected officials have made very critical statements concerning the amount of the settlement, but Brodsky and Alyssa Bonilla of WQPFP campaign say they are missing the point.

“It is a disgrace to pay businesses barely a dollar an hour for the disaster Con Ed inflicted on our neighborhood, which caused three businesses to close and cost others tens of thousands of dollars. Not to mention, customers will be giving that money all back due to the recent rate increase,” Astoria Councilman Peter Vallone said in a written statement. “Every penny that these businesses lost in this instance should be fully reimbursed because of Con Ed’s gross negligence and lies.”

However, because state law severely limits the amounts utilities can be charged following an incident, the number is less important than the result, according to Assemblyman Brodsky.

“The petition is limited to the costs incurred by Con Ed imprudence,” Brodsky said.

Responding to critics he said, “In the end we were able for the first time in the history of the state to provide cash into the community. The results are an unprecedented success. For the first time we were able to get cash into the pockets of people that were damaged.”

Bonilla agreed and views the settlement as a huge victory.
She said the announcement “sets a precedent so people coming after us can ask for a refund on their bills.”

In a statement the group wrote: “Western Queens Power for the People Campaign still firmly believes that Con Edison’s negligence caused the power outage and that our community’s suffering was needless…settlement does not change that. We agreed to this proposal because it is the best possible outcome for the community given the inadequacy of the existing laws.”

Mark Leavitt, an attorney that lives and works in the area affected by the outages said the settlement is definitely a victory for people on the ground.

“They arranged a settlement and framework for compensation of victims of corporate negligence in the future,” he said by telephone.

Assemblyman Brodsky concurs. At the announcement of the agreement he struck a victorious tone and tempered his enthusiasm by asserting that state law restricting utility penalties needs to be changed.

“This settlement is unprecedented because the community will get cash. There is now cash available, this is a huge victory for real people.”

The settlement still needs to be approved by the Pub Service Commission and according to spokesperson Anne Dalton, “there is no schedule yet” for a vote on the proposal. First a judge has to be established, a series of public hearings will be held and a presentation will be made before the PSC. At that time the commission can choose to accept, reject or modify the proposed settlement.