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NYSEG, RG&E customers: Here's how much your delivery rates will increase
Laurie Wheelock, an attorney with the Public Utility Law Project, speaks in opposition to the New York State Electric & Gas Corp. rate increase proposal at a public hearing in Binghamton on Aug. 15, 2019. pressconnects.com
This story has been updated to reflect the correct percentage increase on RG&E delivery rates over the three year term of the agreement.
Electric and gas delivery rates for NYSEG and RG&E customers will rise but at a cost?drastically reduced from the double-digit percentage increases in the original utility proposal.
The state Public Service Commission staff and utility representatives agreed to keep rate increases for both electric and natural gas delivery rates?to below 2% annually over the three-year term which will extend to April 2023, said Administrative Law Judge James Costello.
For the average New York State Electric & Gas Corp residential electric customer delivery rates will rise $2.48 monthly in the first year,?$1.84 in the second year and?$2.42 in the third year. Overall, rates will increase 9.6% over the three year term. Rates will be increased retroactively starting in April 2020.
The average Rochester Gas & Electric electricity delivery rate?will rise $1.20 monthly in the first year, $1.95 in the?second year and?$2.26 in the third year. Overall, rates will increase 8.6% over the three-year term.
Under the proposal submitted last year, cost for?the average NYSEG electric delivery bill ¡ª 600 kilowatt hours ¡ª would have?increased by $2.49 in year one,?$4.13 in year two, and $5.54 in year three. For RG&E customers, the increases would have?been 37 cents in year one,?$3.82 in year two,?and $4.14 in year three.
"This is a reasonable outcome for ratepayers,"?Public Service Commissioner John Howard said after a more than 45-minute discussion on?the rate settlement.
Howard, a former aide to Gov. Andrew Cuomo, said he was alarmed by the initial rate proposal, especially after attending public hearings called to solicit public comment, but the "end result is vastly improved."
A utility representative?welcomed the commission's adoption of a revised rate plan despite the lower revenues that will?result.
¡°Today¡¯s news that the New York Public Service Commission has approved, with modifications, NYSEG and RG&E¡¯s joint proposal agreement is a positive development in the regulatory process," said Michael Jamison, Albany-based utility spokesman.?
"The agreement provides direct COVID-19 relief for customers and small businesses, makes investments in our aging infrastructure, supports a more technologically sophisticated system and reaffirms our commitment to achieving New York¡¯s clean energy goals and future."
The original proposal was pulled back following the conronavirus outbreak as RG&E and NYSEG representatives hammered out a new plan based on the lasting economic impacts of the pandemic.
"We have to look at the consumers' ability to pay," said Public Service Commissioner Tracey Edwards. "We are in unprecedented times."
Included in the rate agreement are $100 bill credits to vulnerable residential and small business customers, along with a moratorium on?late payment fees and more flexible payment arrangements for those in financial distress.?
On natural gas delivery rates, NYSEG?customers will see a slight decrease in monthly rates in the first year; a 53?cent increase in the second year; and $1.22 rise in year three, for an overall increase of 2 percent over the term.?RG&E customers will see a?80 cents?monthly decrease in the first year; an additional 10 cents in the second year; and 81 cents in the third year, for an three-year increase of 1 percent.
Administrative Law Judge James Costello, who oversaw the proceedings, told commissioners the settlement will provide "safe, reliable and adequate service" for customers of the two utilities.
As a concession to the state's green energy initiative that calls for a 70% reduction in greenhouse gases by 2030, the utilities agreed to abandon attempts to expand two natural gas pipelines and reduce promotions of natural gas service, with the goal of zero net increase in gas sales over the period of the agreement.?The utility?will push energy efficiency and environmentally friendly ways to heat and cool homes.
Over the course of the three year term, NYSEG and RG&E agrees to hire more than 500 additional employees, including 150 linemen and apprentice linemen.
"Both?companies have been?operating on a fairly lean basis, especially NYSEG," Costello said.
Investments in utility infrastructure are pegged at $1.6 billion for NYSEG and $871 million for RG&E over the three-year term to increase the "reliability and resiliency" of the distribution system. A?combined $87 million will be used between the two in an aggressive vegetation management program to reduce the occurrence?of tree limbs taking down power lines.
Rollout of advanced metering will be delayed by one year, to 2022.?While giving?the utility nearly instantaneous notification of interruptions in the electric distribution system, the high-tech meters also allow customers to monitor electric use in real time.
Eventually, however, the meters will allow the utility and the electric supplier to adjust rates based on supply and demand?¡ª higher rates during peak times during the day and far less expensive rates in the middle of the night with the expectation that price cues will even out what is now a widely varied?demand pattern.
Since the restructuring of the electric industry in New York about 20 years ago, NYSEG and RG&E are responsible for the delivery of electricity and natural gas across the service territory. As the only owner of pipes and wires in the territory, they must seek rate approval from regulators.
Supply is not subject to regulation and?is now governed by market forces, with customers selecting their own independent company to provide the commodity. However, because of the often convoluted and daunting process involved in?choosing an electric supplier, many residential customers have defaulted to?the resident utility for electric and natural gas supplies.
Closures of six customer service centers across the service area will be delayed to 2021.
NYSEG has 900,000 electric customers and 260,000 natural gas clients over a patchwork area of New York covering 20,000 square miles, about 40% of the upstate New York region.?RG&E has 375,000 electric connections and 308,000 natural gas customers in a service territory covering 2,700 square miles in a nine-county region centered around Rochester.
The utilities parent company, Avangrid, a unit of the Bilbao, Spain company Iberdrola, reported net income of $415?million on revenues of $4.7 billion for the first nine months of 2020, compared with net income of $477 million on revenues of $4.7 billion in the same period one year ago.
Virus delayed rate increase: NYSEG, RG&E delay planned rate increases. Here's why.
Jeff Platsky covers transportation and the economy for the USA TODAY Network New York. He can be reached at JPLATSKY@Gannett.com and followed on Twitter:?@JeffPlatsky.?To get unlimited access to the latest news, please subscribe or activate your digital account today.
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