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.