Con Ed Files Rate Case for 2020 – Seeks 8.6% and 14.5% Increases for Electric and Gas

This past Thursday, Con Edison submitted its rate case for 2020 seeking delivery rate increases of 8.6% and 14.5% for electric and natural gas service, respectively.   Actual rate increases will vary by rate class, residential vs. commercial, and an account’s individual load shape (usage and demand).  The proposed increases, which are subject to review by the NY Public Service Commission and interested parties, such as the New York Energy Consumers Council, would take effect January 1, 2020.  Read on to learn more about the rate case process, Con Ed’s proposed use of funds, and how the rate case may affect your Con Ed rates in 2020 and beyond.

• What is a rate case?
• Why is Con Ed seeking an 8.6% and 14.6% increase in electric and natural gas rates?
• What’s the potential impact on Con Edison rates across rate classes?
• What about steam rates?
• How can I participate in the rate case process?
• How can I manage these rate increases?

What is a rate case?

Rates are determined through a public rate making process.  Con Ed files their rate proposal with the Public Service Commission, supported by expert witnesses, testimonies, and exhibits.  Public Service Law requires a decision within 11 months.  During those 11 months, interested parties and intervenors can ask Con Ed questions regarding their proposal, provide expert witnesses to counter Con Ed’s claims and requests, and ultimately settle or litigate the case (typically a one, two, or three year settlement).

Why is Con Ed seeking an 8.6% and 14.6% increase in electric and natural gas rates?

Con Edison’s submission to the Public Service Commission for a $485 million increase in electric revenues cites “the need for continuing capital investments to provide safety and reliability, to transition [the] system to meet New York State’s energy future, and initiatives and programs to enhance the customer experience and fortify [the] systems for severe weather.”  In order to address these concerns, Con Ed outlines multiple proposed capital projects, which include “developing and installing the new customer service and geographic information systems, increasing storm resilience, and replacing and upgrading certain oil-filled transmission feeders as well as substation equipment.”  These projects, and more, are outlined in the exhibits filed with the Public Service Commission, summarized by category as follows (ED = electric distribution, SSO = electric substations, STO = electric transmission.  Total dollars in $000):

The proposed $210 million increase in natural gas revenues would be allocated towards increasing the safety and reliability of the natural gas system through increased infrastructure investment, increased property taxes, and increased O&M. “The major capital and O&M programs include the main replacement program, upgrading our liquefied natural gas plant that provides important reliability benefits for customers, and increased O&M to comply with new service line inspection requirements.”

What’s the potential impact on Con Edison rates across rate classes?

The percentage changes outlined below are overall bill increases, not just delivery.  The calculation of the overall customer bill increase percentage includes estimates of electric and gas supply costs for Con Edison retail access customers.

What about steam rates?

Con Ed did not file a rate case for steam, and has not filed since 2012.  Currently active steam tariffs will remain in effect. 

How can I participate in the rate case process?

In New York City, the largest energy consumers can participate in the rate making process as members of the New York Energy Consumers Council (www.nyecc.com).  The NYECC has become the largest and most influential consumer representative and advisor within the New York energy industry, saving its members billions of dollars through its involvement in the Con Ed rate cases.  The continuing strength of NYECC’s presence depends, however, on the ongoing involvement and financial support of its membership. Although both members and non-members often win from the work of the Council, no energy customer wins if the Council lacks the financial resources to pursue positive changes to the competitive energy marketplace.  If you’re not a member, please consider joining the NYECC, participating in the rate making process, and helping the NYECC deliver a win for consumers during this rate case, and in future rate cases to come. 

How can I manage these rate increases?

Though you cannot pick an alternative local distribution company / T&D utility (like you can through retail access for electricity/gas supply – i.e. you’re stuck with Con Ed), you can manage T&D rate increases and energy risk through peak load management, benchmarking, and interval data analytics.  You can’t control the T&D unit rates, but by optimizing your consumption and demand, you can manage the costs.