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Q&A - O&R’S 2018 NY Electric and Natural Gas Rate Review Request

Why is O&R proposing new rates for its electric and natural gas service?

O&R is seeking an increase in its electric and natural gas delivery rates to provide for the continued safe, reliable and secure operation of its electric and natural gas delivery systems.

What happens to this request now?

O&R’s request begins a year-long public review process in which the NYSPSC examines the company’s proposals. That review is managed by an administrative law judge who ensures the fairness and thoroughness of the process through to the final decision and vote by the New York State Public Service Commission NYSPSC.

How does today’s rate review request differ from others O&R has made in the past?

O&R’s request reflects the fundamental transformation electric and gas energy companies, particularly in New York State, are undergoing to build a cleaner, more resilient and affordable grid. The era of the power grid with centralized generation and one-way electric flow is transitioning to a more complex, interactive electric grid.

If approved, when will these rates become effective?

January 1, 2019



Electric Delivery Rates

How much of an increase is O&R asking for electric delivery?

O&R seeks an increase in revenues for electric delivery of $20.3 million.

How will this affect my bill?

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.

How does the recently enacted federal corporate income tax changes affect these new proposed rates?

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.

How about the current O&R electric and gas rates? O&R’s still collecting the federal corporate income taxes at 35 percent. When are we going to see that over-collection passed back to customers?

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.

Does O&R have an alternative rate review proposal to the one-year proposal it has filed?

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.

What are the key components of this proposal?

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.

What key infrastructure projects are planned?

  • 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.

What other new technology or programs are included in the proposal?

O&R is planning to establish new programs, processes and demonstration projects including, most notably, a plan to encourage electric vehicle adoption by its customers. O&R 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.


Natural Gas Delivery Rates


How much of an increase is O&R asking for natural gas delivery?

O&R seeks an increase in revenues for natural gas delivery of $4.5 million.

How will this affect my bill?

The overall bill for a typical residential natural gas customer using a monthly average of 100 Ccf would increase an average of about $4 per month, from $133.64 to $137.76.

Where will the money go?

O&R has implemented a number of programs to support and fortify the operation of its natural gas delivery system to continue to provide safe, reliable and clean natural gas service.

What specifically?

The primary driver for these projects continues to be replacing aging natural gas piping. By replacing aging pipe, O&R is reducing the safety risks associated with potential leaks and is also improving overall system efficiency and integrity.

O&R’s natural gas rate review request includes initiatives to:

  • Enhance gas safety by replacing 22 miles of aging pipe per year.
  • Provide greater safety in the operation of the natural gas delivery system by reducing damage done by excavators through: increased deployment of inspectors to job sites, video confirmation of pipe location and condition and increased outreach and education to excavators.

These increases could be hard to afford for some. What programs do you have to help people pay their bills?

Many customers have found that O&R’s Budget Billing program helps them better manage their household expenses by leveling out the seasonal usage variations on the bill. Budget Billing does not reduce your energy bill. It simply lets you spread your annual energy expense over a 12-month period and lets you know in advance what your payment will be so you’ll be able to better plan your expenses.

To enroll, use the on-line form or call O&R’s Customer Assistance toll-free at 1-877-434-4100.

If you are having trouble paying your energy bill, call us at 1-877-434-4100. We can offer you advice on how to arrange payment agreements or contact social services agencies for help.

For customers with more profound bill-payment issues, O&R’s Neighbor Fund provides critical home-heating assistance for those O&R customers who find themselves unable to pay their home heating fuel bills because of emergency financial conditions.

The Neighbor Fund provides a one-time grant for electric customers of $250 and for heating fuel customers of $250.

Grants from The Neighbor Fund are awarded to pay for home energy costs no matter what type of fuel is used  — electricity, oil, natural gas, propane, wood or coal. The grant money does not have to be repaid, and there are no age limits or income guidelines to be met.

To qualify for The Neighbor Fund grant, individuals must have an account with O&R and must already exhaust all governmental resources available for financial assistance. They must also provide supporting documentation of emergency/crisis circumstances (medical bills, unemployment notification, etc.)

The Salvation Army administers The Neighbor Fund program, evaluates Neighbor Fund applications and makes the grants.


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