O&R, NYSPSC Staff, Interested Parties Forge Electric, Gas Rate Proposal
Orange and Rockland Utilities, Inc. (O&R), working with the staff of the New York State Department of Public Service (NYSDPS) and several other interested parties, has developed and filed with the New York State Public Service Commission (NYSPSC), a joint proposal for new, three-year delivery rate plans for both O&R’s electric and natural gas services.
The new rate plans were designed to provide for the continued safety, reliability and security of O&R’s electric and natural gas delivery systems at just and reasonable rates. The new proposed delivery rate plans for both electric and natural gas would be effective from January 1, 2019 through December 31, 2021.
O&R filed electric and natural gas rate review requests with the NYSPSC on January 26, 2018. That began an intensive public review process with the NYSDPS and over a dozen interested parties, including energy industry representatives, consumer advocacy groups, environmental advocacy groups and local governments.
Chief among the local government groups that worked in developing the joint proposal is the Municipal Coalition which includes the towns of Clarkstown, Haverstraw, Orangetown, Ramapo and Stony Point, and the Rockland County Solid Waste Management Authority. The Municipal Coalition has endorsed the joint proposal.
The joint proposal provides for substantial investment in the communities O&R serves in Rockland, Orange and Sullivan counties for energy efficiency, carbon emissions reduction and the development of environmentally beneficial electrical technologies such as electric vehicles and ground-sourced heat pumps.
The plans also include the continued roll out of O&R’s NYPSC-approved smart meter program. Smart meters are designed to provide O&R customers greater choice, control and convenience over their energy use, support quicker restoration of service after a storm event, and reduce costs for meter reading and customer field services.
The smart meter program also provides the technology foundation for many of the proposals stemming from New York State’s major initiative aimed at redesigning and modernizing the electric utility industry in New York.
Further, the joint proposal includes plans for building new electric substations and upgrading infrastructure, including transmission and distribution lines and facilities, to provide reliable service.
The joint proposal contains capital and operations and maintenance (O&M) spending to improve the natural gas delivery system’s reliability through the replacement of aging infrastructure and to improve O&R operations through the development of an expanded training facility for both company personnel and contractors.
Under the new proposed plans, O&R will continue to replace aging gas pipe at a rate of 20 miles per calendar year. In addition, the company will continue, and develop, various pipeline safety programs, including the deployment of remote methane leak detection technology and training for first responders in the use of this technology; deployment of residential methane detectors; an upgrade of the company’s electronic mapping system and hiring additional seasonal locating contractors to safeguard underground utility services from construction damage.
The joint proposal is 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 joint proposals. The hearings have not yet been scheduled by the NYSPSC.
Under the new electric rate plan, O&R’s electric delivery revenues would increase $8.6 million in 2019, an additional $12.056 million in 2020, and an additional $12.170 million in 2021.
If the new plan is approved by the NYSPSC, the overall bill for a typical residential electric customer using a monthly average of 600 kWh would increase an average of approximately $2.90 per month, from $120.84 to $123.74 or approximately 2.4 percent in the first year, with an additional increase of approximately 2.5 % per month, in both the second and third year.
These proposed electric delivery rates have been moderated by O&R’s applying $14.34 million in savings resulting from the 2017 federal Tax Cuts and Jobs Act to reduce its revenue request.
Further, O&R will be using approximately $1.7 million in forecasted savings the company plans to achieve through its efforts to reduce its business costs to also decrease its revenue request.
Under the new natural gas rate plan, O&R’s natural gas delivery revenues would decrease by $5.9 million in 2019 and increase by $1 million in 2020 and 2021.
If the new natural gas plan is approved by the NYSPSC, the overall natural gas bill for a typical residential full service natural gas customer using a monthly average of 100 ccf would decrease an average $1.99 per month, from $133.64 to $131.65 or approximately 1.5 percent lower in the first year, with an increase of 0.6% the second year and an additional increase of 0.8 % in the third year of the plan.
The proposed natural gas delivery rates have been reduced in the first year of the plan by O&R’s applying $8.17 million in savings also resulting from the 2017 federal Tax Cuts and Jobs Act to reduce its revenue request.
Forecasted savings the company plans to achieve through its efforts to reduce its business costs also further contributed to the natural gas rate reduction by approximately $800,000.
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 and natural gas bills are the costs of the electricity and natural gas commodities themselves which are set by largely unregulated market activity, and taxes and fees.
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