Consolidated Edison Proposes Rate Request

(AP Photo/Frank Franklin II)

NEW YORK – In January 2019, Consolidated Edison Company – Con Ed – requested that the New York State Public Service Commission (PSC) approve proposed increases to its electric and gas delivery rates. Con Ed supplied documentation of support for these increases before initiating the formal proceedings in this case.

Department of Public Service (DPS) Staff, which represents the public in rate proceedings, evaluated the company’s request by doing an analysis to decide whether – or to what extent – a rate increase is justified.

On October 18, 2019, DPS Staff, Con Edison and other parties entered into a Joint Proposal that proposes new rate plans for Con Edison’s electric and gas delivery services for three years, beginning January 1, 2020, through December 31, 2022.

“After our independent review process,” said James Denn of DPS, “we slashed Con Ed’s initial electric rate proposal by $1 billion, and cut its initial gas rate proposal by nearly $400 million over the next three years.

“That revised proposal is still being subjected to rigorous public comment and stakeholder review before coming to the PSC for a final decision,” said Mr. Denn. Under New York State Law, the Commission must consider a utility’s proposal and may adopt, modify or reject it in whole or in part.

Summary of the Rate Case

According to Con Ed’s filings of January 31, 2019, the primary goals are to build the infrastructure that will provide safe and reliable electric and gas service while implementing new state-of-the-art technology to better serve its approximately three-and-a-half million customers in New York City and Westchester County.

The Joint Proposal of October 18, 2019 proposed a three-year rate plan for Con Ed’s electric and gas delivery services beginning January 1, 2020, through December 31, 2022. The Joint Proposal recommends electric and gas delivery rates that are lower than those originally set forth by Con Ed, yet still aims to achieve the utility’s primary stated goals.

Overview of the Joint Proposal

An electric or gas bill reflects two charges: delivery and supply. The delivery charge is the cost to transport the electricity or gas to customers throughout the utility’s system. The supply charge is the cost of the electricity or gas itself, which is determined by the competitive markets. The delivery charge is regulated by the Commission, while the supply charge is not set by the Commission or the utility.

If the Commission approves the proposed rate increases, the average monthly increase for electric and gas customers in first rate year (RY1) would be 7.5%, 8.8% in the second rate year (RY2), and 7.2% in the third rate year (RY3).

“This agreement reached with multiple outside parties, if approved, will allow for approximately $3 billion per year in electric and gas infrastructure investments, to continue providing New Yorkers with safe and reliable service, while building the path to renewable energy and a cleaner environment,” said Allan Drury, a spokesman for Con Edison. “The plan provides $700 million for energy efficiency programs over the next three years to help people reduce usage and save money, offers incentives for electric vehicle charging, and helps encourage alternatives to natural gas for heating. The agreement includes programs [which are] essential to helping New York State achieve its clean energy goals.”

Major Rate Case Components

Con Edison justified the planned rate increases to fund four components of its operation: to fund new IT-related applications; to provide a discount to eligible low-income residential customers; to facilitate electric vehicles in New York; and to increase storm resilience.

Public Involvement

The Commission encourages public input in the rate-setting process. Stakeholders – such as consumers, government agencies and officials, public interest and environmental groups, and industry representatives – are invited to participate in the process by reviewing the proposals and submitting comments.

Comments may be submitted on the Joint Proposal via Public Statement Hearings in December 2019; via the Department’s website (www.dps.ny.gov) and then entering the associated case number (19-E-0065 or 19-G-0066) in the “Search by Case Number” field; via email to Michelle L. Phillips, Secretary, at secretary@dps.ny.gov; by mail to Secretary Burgess at the Department of Public Service, Three Empire State Plaza, Albany, New York 12223-1350 [reference “Consolidated Edison Company of New York, Inc. Rate Case” (19-E-0065 and 19-G-0066)]”; or via the 24-hour toll-free Opinion Line at 1-800-335-2120.

Public Statement Hearings

Interested members of the public are invited to attend the public statement hearings and provide comments regarding the proposal. It is not necessary to make an appointment in advance or present written material in order to speak at the hearing.