New York Commission Slashes NYSEG, RG&E Rate Increase Request by 70 Percent

The New York Public Service Commission on Nov. 19 established a three-year rate plan for New York State Electric & Gas Corporation and Rochester Gas and Electric Corporation, both subsidiaries of Avangrid Inc., starting from April 2020. The commission approved a combined first-year rate increase of $65million, which is about 70 percent lower than what the companies originally requested.

The commission order modifies the companies’ joint settlement to provide additional rate relief including a $30 million fund for financially stressed residential and small business customers. Further, the order allots $2.5 billion for electric utilities to replace aging infrastructure to enhance reliability and undertake energy efficiency and non-wires alternatives. Low-income customers will receive credits to offset 70 to 90 percent of the rate hike.

The order changes the joint proposal’s NYSEG electric delivery revenue increases in: 

• the first year from $45.7 million to $45.3 million; 
•  the second year from $84.8 million to $45.6 million;
•  the third year from $88.6 million to $36.0 million. 

With respect to RG&E, the order modifies RG&E’s electric delivery revenue increases in:

• the first year from $15.2 million to $21.4 million;
• the second year from $28.1 million to $13.9 million;
• the third year from $30.7 million to $15.8 million.

NYSEG’s electric customers would see total bill increases of 2 percent in the first year, 1.95 percent in second year, and 1.99 percent in the third year. The company’s gas customers would see a decrease in the average monthly bill of $0.02 in the first year, an increase of $0.53, or 0.6percent in the second year, and an increase of $1.22, or 1.4percent in the third year.

The commission did not modify the joint proposal’s gas revenue requests. For RG&E’s electric customers, the change results in total bill increases of 1.56 percent in the first year, 1.98 percent in the second year, and 1.99 percent in the third year. Gas customers will have corresponding average monthly bill impacts of 0.1 percent decrease, 0.1 percent increase and 1.1 percent increase, respectively.

Other highlights of the settlement include strategies to ensure compliance with the 2019 Climate Leadership and Community Protection Act, with the companies committing to achieving net-zero growth in gas sales during the three-year period, discontinuing promotion of gas services, incentivizing the expanded use of heat pumps and advancing non-pipe alternatives. The agreement includes customer service metrics such as an earnings-sharing provision, downward-only reconciliation mechanisms, and negative revenue adjustments to track the companies’ performance for certain services, electric reliability and gas safety.