NYSPSC Approves O&R Joint Electric, Gas Rate Proposal

The New York State Public Service Commission (NYSPSC) today voted to approve a joint proposal forged by Orange and Rockland Utilities (O&R), the New York State Department of Public Service (NYSDPS) staff and several other interested parties that provides new three-year delivery rate plans for both O&R’s electric and natural gas services.

The new rate plans were designed to allow O&R to continue to provide its customers with safe, reliable and secure electric and natural gas service at just and reasonable rates.

The new rate plans for both electric and natural gas delivery service will be effective from January 1, 2019 through December 31, 2021.

The new natural gas delivery rates will be approximately 1.5 percent lower in the first year with an increase of about 0.6 percent the second year and an additional increase of approximately 0.8 percent in the third year of the plan.

The new electric delivery rates will be approximately 2.4 percent higher in the first year, with an additional increase of approximately 2.5 percent in both the second and third year.

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 new plans provide 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.

Further, the plans include initiatives for building new electric substations and upgrading infrastructure, including transmission and distribution lines and facilities, to provide reliable service.

The new plans contain 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 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 further develop, various pipeline safety programs. This includes the deployment of state-of-the-art remote methane leak detection technology and training for first responders in the use of this technology; an upgrade of the company’s electronic mapping system and additional seasonal locating contractors to safeguard underground utility services from construction damage.

 

Under the new electric rates, O&R’s electric delivery revenues would increase $8.6 million in 2019, an additional $12.1 million in 2020, and an additional $12.2 million in 2021.

 

These new electric delivery rates have been moderated by O&R’s applying $14 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 electric rates, 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 percent in both the second and third year.

 

Under the new natural gas rates, O&R’s natural gas delivery revenues would decrease by $5.9 million in 2019 and increase by $1 million in 2020 and 2021.

The new natural gas delivery rates have been reduced 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.  

 

Under the new natural gas rates, 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 percent the second year and an additional increase of 0.8 percent in the third year of the plan.

 

These new rate plans are specific to covering 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.

 

The joint proposal is available on O&R’s website at:

https://www.oru.com/_external/orurates/documents/ny/2018-joint-proposal.pdf


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