In a filing January 29 with the state Public Service Commission, Con Edison proposes raising New York City residential electric bills an average of 5.2 percent, and residential gas heating bills an average 7.7 percent. Both proposals are for one-year increases, though the company says it is open to making a longer term deal with the state.
The proposed increase for Westchester County customers is a bit bigger. A typical Westchester residential customer uses 450 kilowatt hours of electricity per month. Their bills would rise $6.25 per month, to $115.89.
The gas picture is a bit more complicated, because people use gas in different ways. Typical Con Edison home heating customers would see their monthly bills rise by $10.99, to $153.30, an increase of 7.7 percent. Folks who only gas for cooking would see their bills rise by $3.75, to $29.75. That’s an increase of 14.4 percent.
It’s been a while since Con Edison has had rate increases. Its last electric hike was in April 2012, and its last gas hike was in October 2012.
If you follow the news, you know that energy prices are plunging – prices of oil and gas are at historic lows. US Energy Information Administration data shows that wholesale natural gas prices are about half what they were in early 2014. Con Edison resells natural gas to its heating and cooking customers – and natural gas is the main fuel used in New York’s electric power plants.
So why is Con Ed seeking such a big rate increase?
The answer is that Con Edison is looking for more money to pay for the wires and pipes that deliver gas and electricity to its customers.
While the overall electric price increase for a New York City residential customer is 5.2 percent, a look inside the number shows that the company’s delivery charge – what it gets for running wires to your home – will rise 8.4 percent.
It’s the same deal for gas. Inside the overall 7.7 percent rate hike for heating customers is an 11.5 percent boost in what Con Ed gets for delivering the gas to you. The 11.5 percent boost for cooking gas customers includes a 14.4 percent hike in delivery charges.
Con Edison says it will put the money from the rate hike toward safety improvements, storm hardening and better service.
The company wants to boost its program to replace gas mains. Right now, it replaces 65 miles of gas lines each year. It wants to boost the program to 100 miles per year, “reducing the time of total system replacement from over 30 years to 20 years,” according to a news release.
The condition of gas lines became an issue after a March 2014 gas explosion in East Harlem killed eight people and leveled two buildings. National Transportation Safety Board investigators blamed the blast on a combination of bad welding in Con Ed gas pipes and an unrepaired city sewer main leak that eroded the soil near the main.
On the electric side, Con Ed also wants to install smart meters that will alert the company to blackouts and better handle rooftop solar.
It takes the state about 11 months to handle a big rate case. Between now and next January, the Public Service Commission will hold hearings and ask questions of the company about its spending and its service.