Consolidated Edison Co. of New York Inc.'s three-year $505 million electric rate hike, alongside a $176.5 million gas rate increase, has been approved by New York regulators.
The New York State Public Service Commission authorized on Jan. 24 the first increase in electric delivery rates in nearly five years for Con Edison customers and the first in more than four years for gas rates.
The rate plan for the Consolidated Edison Inc. subsidiary seeks to encourage the connection of solar and other renewables, expand gas safety and discounts for low-income customers, and increase the availability of energy efficiency, smart-grid technologies and other energy cost-saving alternatives for customers in New York City and Westchester County, N.Y. The rate plan was jointly filed by Con Edison, commission staff, the New York Power Authority and New York City in September 2016.
Commission Chair Audrey Zibelman said in a news release that the plan furthers the state's "efforts to move utilities toward a cleaner, more distributed, customer-centric model for utility service, along with less-costly and cleaner alternatives to traditional utility infrastructure investments."
Con Edison said in a statement that the plan will also enhance safety, integrate cleaner energy, maintain reliability and advance smart meters, energy efficiency programs and new technology to give customers greater control over their energy usage and bills.
New incentives under the plan will allow ratepayers to participate in and benefit from Con Edison programs aimed at reducing peak demand and procuring cost-effective alternatives to traditional electric infrastructure. The commission also approved a companion order to create new incentives related to Con Edison's electric targeted demand management program that are intended to reduce Con Edison's need to build or expand distribution infrastructure by allowing the utility to use energy efficiency and other measures to help customers lower their electricity demand.
"Maintaining the status quo with an inefficient 'peak-power' system year-round when it is only needed for a few days of peak power demand makes no sense," added Zibelman.
Under the electric rate plan, Con Edison customers will see a $194.5 million increase in the first year effective Jan. 1, 2017; a $155.3 million increase in 2018 and a $155.2 million increase for 2019, based on a 9.0% return on equity. The 2017 rate change is in addition to a $47.8 million electric base rate increase previously approved that became effective this month as a result of the expiration of a temporary credit under Con Edison's previous electric rate plan. Con Edison originally asked in January 2016 for a $482 million electric rate increase with a 9.75% ROE.
According to Con Edison, a typical New York City residential customer using 300 kWh a month the first year would see a bill increase by 2.3%, and a typical Westchester County residential customer using 450 kWh per month the first year would see a bill increase of 2.5%. A typical commercial customer using 10,800 kWh per month the first year with a peak demand of 30 kW would see a monthly bill increase of 1.3%.
Con Edison gas customers will see a $5.3 million net decrease the first year effective Jan. 1, 2017, a $92.3 million increase for 2018 and an $89.5 million increase for 2019, based on a 9.0% ROE. The 2017 rate decrease will be offset by a $40.9 million base increase previously approved as a result of expiration of a temporary credit under Con Edison's previous gas rate plan. Con Edison's gas rate increase request was originally $154 million with a 9.75% ROE.
For 2017, a typical residential customer using natural gas for heating would see an average monthly bill increase of 1.7%, while businesses using an average 327 therms per month would see an average monthly bill decrease of 0.9%. A typical residential customer using natural gas for cooking would see an average monthly bill increase of 5.5%.
Separately, the commission permitted the utility to earn electric and gas performance incentives of up to $28 million and $7 million, respectively, the first year, $47 million and $8 million in the second year, and $64 million and $8 million in the third year.
Low-income discounts established in 2016 by the commission to keep energy costs below 6% of a household's income will also be expanded to include Medicaid recipients within Con Edison's service area. As a result, approximately 93,000 electric customers now eligible for the discounts will increase the electric discount budget from $47.5 million to $54.7 million annually. (New York PSC Case Nos. 16-E-0060 and 16-G-0061)