Members of the Public Service Commission found a way to ease the automatic rate hike Con Edison customers will face if the company decides not to seek new rates for 2016. AARP, which says its members worry about high Con Ed gas and electricity rates, discovered this back-end rate increase.
Without action by the commission, Con Edison’s electricity delivery rates — the part of your bill that pays for wires, transformers and the like — would automatically have risen by 0.41 percent in January 2016, the commission says.
But in its vote Feb. 20 approving a freeze on Con Ed rates, the commission said that it expects the freeze will leave the company with $30.1 million in what it calls “customer credits.” That cash will be used to mitigate the January 2016 rate hike, curbing the potential increase to 0.15 percent.
All this is academic if Con Edison follows normal practice and files for a new electric rate case next year. But AARP had a legitimate concern. For a variety of reasons, Con Edison delayed filing for its current rate case for more than a year, and operated from March to December under the terms of an expired rate order.
For more on the PSC’s 5-0 vote approving the Con Edison rate freeze, see my coverage in The Wall Street Journal. You may also want to look at this earlier post about how the deal is a loss for consumer advocates.
Keep in mind the Con Edison rate freeze — two years for electricity rates, and three years for gas rates — only covers the delivery portion of your bill, which is what Con Ed collects to pay for the wires and gas lines that deliver electricity and gas to your home.
The supply portion of your bill — which covers the cost of electricity generation and natural gas itself — is not regulated by the state and fluctuates according to market conditions. I’ve written a couple of posts on that topic, which you’ll find here and here.