Rate Case Q&A: Electric Delivery Rates
O&R seeks an increase in revenues for electric delivery of $20.3 million.
The overall bill for a typical residential electric customer using a monthly average of 600 kWh would increase an average of about $6 per month, from $122.03 to $128.21.
The revenue increases to fund both the electric and natural gas delivery proposals in the company’s request were mitigated by the recently enacted federal tax code changes that reduced O&R’s corporate income tax rate from 35 percent to 21 percent.
O&R will realize a tax savings under its current energy delivery rates from January 2018, the time the new federal corporate tax changes became effective, until January 2019 when new O&R energy delivery rates are due to go into effect. O&R will defer the federal corporate tax savings from that period as a customer benefit. The NYSPSC is expected to decide the amount, manner and timing of that customer benefit’s return to customers.
Although today’s filings are for one-year rate agreements for both electric and natural gas delivery service, O&R is open to explore multi-year rate plans in discussion with the NYSPSC’s Department of Public Service staff and other stakeholders. Multi-year rate plans benefit customers by providing certainty about the level of the company’s delivery rates over a number of years.
To further improve future customer experience and increase customer engagement, O&R plans to:
· Install 230,000 electric smart meters and 130,000 smart gas modules in its New York service area by 2020. These devices are designed to provide customers greater choice, convenience and control over their energy use. Smart meters also permit customers to better participate in energy efficiency and demand response programs.
· Enhance its Digital Customer Experience (DCX) program. This program is designed to continuously improve the customers’ experience with O&R’s customer-facing digital platforms, including the company’s website, “My Account” portal and the mobile app.
· Continue to invest in the Green Button Connect (GBC) program. This digital tool provides all customers with the ability to download their energy usage data into a standard electronic format that makes it easier for customers to share their usage information directly with designated third-parties. Those technicians will use this information to develop new products, services and pricing programs designed to help customers save money through more choice and personalized energy services.
· Expand its energy efficiency programs. Since 2009, 22,000 customers using these programs have saved 117,000 MWh of electricity, 110,000 Dth of natural gas, reduced peak electric demand by over 26 MW and have reduced carbon emissions by 32,000 tons. That 117,000MWh is enough energy to power over 14,000 homes, and is equivalent to taking 5,300 cars off the road. The 26 MWs of peak electric demand is enough to meet the peak demand needs of four Palisades Malls. Four more new energy efficiency programs have been developed for residential customers, including integrating more energy efficient products and instant purchase rebates into the My ORU Store.
· Develop new energy efficiency programs for commercial and industrial (C&I) customers. O&R plans to employ software analytics to further advise these customers in saving energy and money through personalized energy efficiency recommendations and customized usage reports.
· Assist the pairing of C&I customers with low-interest energy efficiency financing options available through NYSERDA’s Green Bank, the New York Power Authority and other financial institutions.
Lovett 345kV Substation – O&R plans to build a new high-voltage substation on a 5-acre portion of the former Lovett Generating Station site in Stony Point. That project redesigns and expands the transmission system to increase the amount of electricity that can be channeled into the O&R system from the statewide grid. This project will improve electric service reliability to 56,000 O&R customers in Rockland County.
This project’s estimated cost is approximately $33 million and its in-service date is May 2021.
Port Jervis Substation Rebuild and Expansion – O&R plans to replace its existing electric substation in Port Jervis with a modern, expanded substation on the same footprint.
This project will improve electric service reliability to approximately 5,000 customers it directly serves in Port Jervis, Greenville and Deerpark, and to another nearly 5,000 customers it indirectly serves in the area, including Westtown.
This project’s estimated cost is approximately $28 million and its in-service date is June 2020.
Little Tor Substation – O&R plans to build a new electric substation at the southwestern corner of South Mountain Road and North Little Tor Road in New City to address potentially serious electric service reliability issues in that area.
The new Little Tor substation will substantially improve electric service reliability for approximately 4,000 customers it would directly serve and the approximately 32,000 customers served by the three substations that now provide service to the Little Tor area. The mobile substation would then be available to provide emergency service as needed elsewhere in the O&R system.
The estimated cost of this project is about $24.5 million and its in-service date is December 2020.
West Shore Rail TL Structure Replacements (2 projects) – O&R plans two projects along the CSX rail line right of way (the former West Shore Rail Line) between West Nyack and Stony Point.
Each project will install three double-circuit, galvanized steel poles to replace three double-circuit, two-pole, wooden structures.
The first project is due in service in December 2019 at a cost of approximately $1.5 million. Those structures are in Stony Point, the village of Haverstraw and the Clarkstown hamlet of Congers. The second project is due in service one year later at $1.5 million. Those structures are all in the Clarkstown hamlet of Valley Cottage.
The installation of these projects will improve electric service reliability for approximately 22,000 O&R customers in Rockland County.
O&R is planning to establish new programs, processes and demonstration projects. For example, O&R plans to encourage electric vehicle adoption by its customers through the installation of plug-in electric vehicle (PEV) chargers and DC fast chargers, rebates for prospective residential PEV buyers, education and outreach programs and its existing residential time-of-use rates.
O&R also will test new opportunities to better balance electric demand on the grid, further improve efficiency and increasingly boost reliability and resilience.
One of those programs addresses the development of non-wires alternatives (NWAs), such as battery storage or increased energy efficiency, for example, to potentially eliminate or defer the cost of some traditional investments in new and/or upgraded transmission and distribution assets.
All proposed O&R capital electric transmission projects are now screened with a new test to determine if they are suitable for NWA consideration. O&R’s Pomona Project currently is focusing on NWA solutions to defer the costs of a major transmission and substation project in Rockland.