Con Edison customers will catch a big tax break in the coming months. The company has won a years-long property tax battle with New York City that could put $85 million in electric ratepayers’ pockets, a sum that works out to roughly $25 for each of its 3.3 million electric customers.
The company’s 1,800 steam customers — large buildings such as office buildings and apartment complexes — would also benefit, to the tune of about $35 million, or $19,000 apiece.
Con Ed will keep the remaining $20 million for its shareholders and to cover the cost of getting the money back from the city. As part of the deal, Con Ed agreed to spend at least $140 million on hardening its facilities against future Hurricane Sandy-type disasters. That was no biggie — the company had already promised to spend more than $1 billion on such projects.
Con Ed disclosed the settlement last week in a filing with the state Public Service Commission.
The bulk of the $140 million, about $87 million, comes from a feud over property taxes Con Ed paid between 1994 and 1999 on the generating plants it once owned in Astoria, Queens. The company was forced to sell the plants when the state deregulated its electricity markets in 1999. Con Ed got another $53 million by challenging the city’s assessments between 1994 and 2012 on its steam and electric generating facility on Hudson Avenue in Brooklyn, next to the Brooklyn Navy Yard.
The company filed its first complaint about its tax bill in 1994. It won a series of state court rulings over the years that led the city to settlement talks. Con Ed and the city finally struck the $140 million deal in June.
Don’t count up the savings in your electric bill just yet. Con Ed has the cash in hand — the city handed it over on July 25. But the PSC will likely take several months to weigh Con Ed’s proposal for distributing the money, and someone may go to the commission with a different idea for distributing it than what Con Ed proposes. You won’t get a check — typically, such settlements are handed back via bill credits.
The PSC is still trying to figure out how to distribute $48 million allotted to utility customers statewide in the settlement of a case involving a commodity trading company’s alleged illicit electricity trafficking across New York’s power grid. The Federal Energy Regulatory Commission settled the case last October, and the PSC began officially considering a distribution plan in June. Con Ed has proposed returning its customers’ share of that money via a one-time bill credit.