Thank you, Consolidated Edison of New York.
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I never expected to write that, but I felt obliged to applaud the Big Apple's biggest energy utility for pulling the plug on one of the most perverse energy boondoggles I have encountered to date.
The Madison Square Garden Complex, located between 31st and 33rd Streets and Seventh and Eighth Avenues on Manhattan’s West Side, seats up to 21,000 spectators and contains roughly 1,100,000 square feet of floor space over 11 levels.
Home to the New York Knicks and the Rangers, the Garden hosts hundreds of events and millions of visitors every year. In 2009, Billboard Magazine ranked The Garden the number one venue of the decade in its respective class based upon gross ticket sales.
Last year, Forbes ranked the New York Knicks as the most valuable team in the National Basketball Association.
While there are admittedly many factors affecting Madison Square Garden’s economic performance, at least one of them is that it Con Edison’s customers have paid a big part of the Garden’s annual electric bill for the past three decades.
In 1982, New York State passed legislation that providing MSG with property tax relief and a discount on its electric bill from Con Edison to prevent the Knicks and Rangers franchises from leaving New York City.
Unlike the tax breaks, Con Edison’s customers – as opposed to New York’s tax payers – pay for the discount, which is a privately-owned, for-profit entity.
In 2012, Con Edison’s customers paid about $650,000 (the value of the discount) to keep the lights on at MSG.
Last year, Con Edison said it would discontinue the “rate discount that has applied uniquely to MSG since 1982, the cost of which has been paid for by the rest of Con Edison’s customers,” according to regulatory filings.
MSG filed a complaint with the New York State Public Service Commission challenging Con Edison’s decision to end the discount.
In my opinion, the Big Apple will be a better place if MSG loses.