Con Edison seeking big rate increases in 2017

 

Con Edison is looking for big rate increases from gas and electric customers starting in January 2017.

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.

Con Edison proposed electric ratesNew York City apartment dwellers who use 300 kilowatt hours of electricity per month – that’s pretty typical – would see their bills increase by $4.11 per month, to $82.63.

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.Con Edison proposed gas prices

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.

About Bill Sanderson

I'm a New York-based journalist, and a former reporter at the Concord Monitor in New Hampshire, the Bergen Record in New Jersey, and the New York Post. My work has appeared in The Wall Street Journal, MarketWatch.com and Politico New York. Twitter: @wpsanderson.
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One thought on “Con Edison seeking big rate increases in 2017

  1. Mike Weiss says:

    This is great info. Looks like the Rate increase is mostly to fund a system-wide Smart Meter (AMI) installation – upwards of 5 million meters for both electric and gas. In line with REV goals. I wonder if a 1 year increase will raise that much revenue?
    Digging a little deeper on the electric side, there must be the assumption that the cost of electricity supply (kWh) will continue to fall because the Rate increase proposes large Delivery charge increases (15% increase for EL-1 and around 20% increase for a 15kW EL-8 or EL-9 customer). See tables in ConEd’s PSC Exhibit submission, http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={8F684EEB-6426-4E77-BB15-E7033642F06B}

    The Rate Increase will have a major impact for Demand-based customers considering Solar PV. The Value of that Solar will decrease b/c it is known that Solar PV will not reduce Demand Charges. And ConEd’s proposed Rate Increase actually shows a lowering of the kWh charges on the delivery-side. That coupled with assumed reduction in Supply-side kWh charges looks to drop the Value of Solar for Demand-based customers to <10¢/kWh. Not favorable at all compared to EL1 customers gaining an Increase to their Value of Solar under the proposal (probably to around 25¢/kWh).

    NY desperately needs A Value of Solar Tariff to be applied to Demand-based customers (and Energy-only customers, too. It seems intuitive that all locationally similar Solar would be valued the same…regardless of individual customer Rate. In the least, it should be valued at the Effective kWh Rate for Demand-based customers).

    While other service territories are closing in or have hit their 6% Net Metering Cap, Zone J is at a little more than 1.5% Net Metering Capacity. It's highly unlikely that Zone J will hit REV and State goals of local renewable generation w/o Value of Solar Tariff (VOST).

    See Richard Perez, Karl Rabago, and others VOST analysis and REV White Paper,

    http://www3.dps.ny.gov/W/PSCWeb.nsf/96f0fec0b45a3c6485257688006a701a/c12c0a18f55877e785257e6f005d533e/$FILE/Staff_BCA_Whitepaper_Final.pdf

    http://ilsr.org/wp-content/uploads/2013/03/Value-of-PV-to-Austin-Energy.pdf

    http://www.environmentamerica.org/sites/environment/files/reports/EA_shiningrewards_print.pdf

    Thanks Bill!

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