O&R, NYSPSC Staff Reach Electric, Gas Rate Settlements
A proposed new electric rate plan and a proposed new gas rate plan for Orange and Rockland Utilities, Inc. (O&R) have both been endorsed by O&R, the staff of the New York State Department of Public Service (NYSDPS) and various other interested parties.
The new rate plans were developed to provide for the continued safety, reliability and security of O&R's electric and gas delivery systems.The proposed new two-year electric rate plan, which settles O&R's current electric rate request, would affect customers' bills beginning November 1, 2015 through October 31, 2017.The proposed new three-year natural gas rate plan, which settles O&R's current natural gas rate request, would affect customers' bills beginning November 1, 2015 through October 31, 2018.The two proposed rate plans are subject to public hearings and then a vote by the New York State Public Service Commission (NYSPSC), which can approve, amend or reject either one or both rate plans.O&R filed both rate increase requests on November 14, 2014. That began an intensive public review process with the NYSDPS and interested parties, including energy industry representatives, consumer advocacy groups and local governments, which resulted in the proposed rate plans.Under the proposed new electric rate plan, O&R's electric delivery revenues would increase by $9.3 million in the 12-month period beginning November 1, 2015, and $8.8 million in the 12-month period beginning November 1, 2016. If the new plan is approved by the NYSPSC, the overall bill for a typical residential electric customer using a monthly average of 677 kWh would increase an average of $1.85 per month, from $135.86 to $137.71, or approximately 1.4 percent effective November 1, 2015.If the proposed new natural gas rate plan is approved, it would be the first O&R natural gas delivery rate increase in four years. Under the proposed new natural gas rate plan, O&R's natural gas delivery revenues would increase by $27.5 million in the 12-month period beginning November 1, 2015, $4.4 million in the 12-month period beginning November 1, 2016, and $6.7 million in the 12- month period beginning November 1, 2017. However, in order to provide rate stability over the term of the gas rate plan, the Company has recommended a phase in of these revenue changes on a levelized basis. Under this levelized approach, the annual levelized revenue changes would be $16.4 million increases in each year of the gas rate plan. If the proposed new natural gas rate plan is approved by the NYSPSC, the overall natural gas bill for a typical residential gas full service customer using a monthly average of 100 ccf would increase an average of $9.67per month, from $132.96 to $142.63 or 7.3 percent.These new rate plans only cover the cost of delivering electricity and natural gas to O&R's customers. The other components that affect the monthly electric bill are the cost of the electricity itself — the largest portion of the bill — which is set by largely unregulated market activity, taxes and government fees.To ease the rate impact of the increase resulting from costs associated with the recovery from Superstorm Sandy and increased property taxes — both of which were substantial — O&R has agreed to recover both those costs over a five-year period instead of the customary three-year period.The rate plan provides for significant investment in the communities O&R serves in Rockland, Orange and Sullivan counties in New York for energy efficiency and for building and upgrading infrastructure, including transmission and distribution lines and facilities, to provide reliable service.The new electric rate plan also includes funding for the Company's plans to install the first phase of an Advanced Metering Infrastructure ("AMI") system. AMI is an integrated system of meters, communication networks, and data management systems. Among other benefits, it will reduce operating costs and facilitate quicker restoration of service after a storm event by communicating the precise location of service interruptions. AMI will allow customers to better control their energy costs and participate in various energy-efficiency and/or demand response programs.As part of O&R's efforts to reduce future costs to customers and use technology that will enhance customer participation in shaping their energy future, the new electric rate plan provides for a demonstration program that will feature an array of targeted energy management initiatives. Those efforts, developed in concert with the NYSPSC's Reforming the Energy Vision (REV) initiatives to modernize the state's energy utility industry, would be aimed at reducing electric demand in the Pomona area of Rockland County. That project, which O&R would administer in partnership with industry technology leaders, including NYSERDA, would enable O&R to postpone a major capital investment of $56 million for a new substation and underground transmission line. The chief goal of O&R's new natural gas rate plan is to enhance gas safety by significantly accelerating the gas main replacement program and replacing over 22 miles of pipe per year. Included in that 22-mile goal are O&R's plans to remove from the system 2.5 miles per year of cast iron gas pipe, the oldest vintage pipe in the system.The rate filings and additional information are available at www.oru.com/tariffs and www.coned.com/rateplans.