Assemblymember Sarahana Shrestha said she will oppose a proposed rate hike settlement for Central Hudson customers, citing what she called “unjust and unreasonable” profit margins for the utility and a lack of transparency in the process. The joint proposal, developed through closed-door negotiations, would allow Central Hudson to collect nearly $144 million more from ratepayers over three years while raising its return on equity to 9.5%. Shrestha, who represents New York’s 103rd Assembly District, spoke with The Overlook about her opposition to the rate plan and her broader energy agenda.
You’ve called the proposed return on equity for Central Hudson unjust. What would a fair return look like in your eyes, and how should that be determined?
Assemblymember Sarahana Shrestha: The reason utilities are authorized high return on equity (ROE) rates is because they operate in a speculative financial world where investors expect lucrative returns. But a 2025 report by the American Economic Liberties Project estimates a fair ROE would be closer to 5 or 6 percent. They suggest public service commissions use financial analysis to set ROEs at cost-based levels.
Central Hudson is currently allowed to apply ROE to the total shareholder investment in capital projects. That creates two issues: it incentivizes over-investment and drives up authorized profits. If we’re not eliminating the profit motive today through public ownership, then at the very least, the Public Service Commission (PSC) should require Central Hudson to submit a financial analysis modeling different ROEs—down to 5 percent—without passing that cost onto ratepayers.
The PSC has said it aims to cap household utility bills at 6 percent of income. What mechanisms would you like to see implemented to enforce that?
Assemblymember Shrestha: First, 6 percent is already too high for many households. But even so, there are ways to make that goal actionable.
One is rate design. Right now, people who use less energy pay more per kilowatt because fixed costs are shared unevenly. In our Valley Power Authority Act, we propose a progressive structure: the less you use, the less you pay per kilowatt.
Another fix is improving the energy affordability program. Around 1.1 million New Yorkers qualify but aren’t enrolled. That leads to unpaid bills, which utilities use to justify rate increases. If those customers were paying—even reduced amounts—it would help avoid rate hikes.
Gas infrastructure is another issue. Utilities pass on the high costs of maintaining and expanding gas lines to customers. The New York HEAT Act would replace the legal obligation to serve gas with a requirement to serve energy more broadly—whether that’s electric or other forms. In some cases, it would be cheaper to provide households with electric appliances than to extend a gas line.
We’ve heard from Central Hudson customers with empty or second homes being charged over $1,000 per month. How should that be addressed?
Assemblymember Shrestha: That’s a big problem. Even if you’re not using electricity, you’re still paying a high fixed delivery cost. But if the home is truly unoccupied and the bill is that high, I’d also suspect a meter error. One of my constituents was charged $850 instead of $350. The PSC and Central Hudson claim the billing errors are resolved—but we don’t think that’s true.
We should install smart meters, with an opt-out option. That would give accurate, real-time readings and eliminate costly manual checks.
What would you like to see happen before Central Hudson is allowed to raise rates again?
Assemblymember Shrestha: Rate cases bundle increases with obligations, so the PSC will either approve or amend the current joint proposal. But if they do approve it, they should make a few conditions.
First, require Central Hudson to submit that financial analysis showing what lower ROEs would look like. Second, the PSC should include a plan to cap bills at 6 percent of household income moving forward. Third, they should reopen the investigation into billing errors. We keep hearing from people receiving incorrect bills, but they often don’t report it—so the PSC assumes the issue is fixed. It’s not.
Some critics say continued investment in gas infrastructure undermines New York’s decarbonization goals. How should lawmakers balance service needs with climate targets?
Assemblymember Shrestha: The New York HEAT Act is designed to address exactly this. It replaces the obligation to serve gas with a broader mandate to serve energy. If a home can be served more affordably and cleanly with electricity, then that should be the default.
Utilities are already piloting this voluntarily—converting entire neighborhoods off gas—and they report success. We just want to scale it. Workers currently maintaining gas lines have transferable skills for geothermal systems. And it’s a myth that gas is cheaper. In fact, in the current joint proposal, gas customers face steeper rate hikes than electric customers.
Do you believe what’s happening with Central Hudson amounts to misconduct or corruption?
Assemblymember Shrestha: When a company’s goal is maximizing profit, it will go to any length. Central Hudson’s parent company, Fortis, owns an unregulated subsidiary that sells petroleum products. So there are incentives not immediately obvious that shape their decisions. They say they promote electrification—but then they don’t support the HEAT Act. They have no real incentive to dismantle their gas business.
What are your legislative priorities in the weeks ahead?
Assemblymember Shrestha: We have about six weeks left in session, and we’re pushing to pass standalone bills. One bill I introduced would prohibit shutoffs during active investigations—for example, during the Central Hudson billing crisis. When they voluntarily suspended shutoffs, no one really knew it was in place. After the PSC closed the investigation, shutoffs resumed, and some people are now being disconnected without notice. Our bill would impose a mandatory 60-day no-shutoff period after investigations close.
We’re also prioritizing grassroots organizing around the Hudson Valley Power Authority. That’s a long-term goal. Even a five-year timeline would be considered fast for something of that scale.
What is the Hudson Valley Power Authority bill, and who’s sponsoring it in the Senate?
Assemblymember Shrestha: The bill would replace Central Hudson with a not-for-profit state utility. It would eliminate shareholder profits and offer energy at cost. State Sen. Michelle Hinchey is sponsoring it on the Senate side. We have many advantages—strong local support, political backing, and the worst-ranked utility in the state—but we still have to build momentum. Nothing moves fast in Albany. When we passed the Public Renewables Act, it took four years—but just four months after I took office. That’s rare, but it shows that when the conditions are right, big things can happen.
This interview has been slightly edited for length, clarity, and tone.
Noah Eckstein is the editor-in-chief of The Overlook. Send correspondence to noah@theoverlooknews.com.