“The settlement filed today puts customers first and, upon
approval, will provide immediate COVID-19 relief to residential and commercial
customers, while also limiting the rate impact to ensure that NYSEG and
RG&E customers will continue to have among the lowest electric and gas rates
in the state,” said Carl A. Taylor, President and CEO of NYSEG and RG&E.
“The proposed plan will enable much needed investment in our infrastructure and
harnesses the power of technology to make our electric system more resilient,
providing for a better customer experience. It also re-affirms our commitment
to build more economic, social and environmentally sustainable communities
throughout the areas we serve.”
Details of the settlement include a three-year rate plan
that includes the following benefits to customers:
COVID-19 Relief
The settlement provides up to $30 million for COVID-19
relief ($16.5 million for NYSEG and $13.5 million for RG&E) for the
companies’ most vulnerable residential and small commercial business customers.
The money will be distributed by the companies automatically through $100 bill
credits and in three phases, starting in October 2020, pending regulatory
approval, with an initial pool of roughly 133,000 residential and small
commercial customers.
The companies will create two new electric economic
development programs targeted towards both small and large businesses. A $2
million annual Small Business Customer Program and a $4 million annual Large
Business Customer program will be established using funds from the companies’
proposed economic development program to assist businesses that have been
impacted as a result of COVID-19.
As part of the COVID-19 response, the companies will
continue to maintain an arrears forgiveness program as part of the Low-Income
Program; and institute a more flexible deferred payment agreement program.
Support for New York’s Clean Energy Future
As part of the settlement filed for NYSEG and RG&E’s gas
businesses, the companies agreed to robust measures that maintain the safety of
the natural gas delivery system while taking real steps towards helping the
state achieve the energy and environmental goals contained within the Climate
Leadership and Community Protection Act (CLCPA).
The companies commit to structure their gas system planning
with the objective of achieving a zero-net increase in gas usage. To accomplish
this, the companies will promote and incentivize the use of heat pumps and will
place increased emphasis on Non-Pipe Alternatives to help reduce natural gas
consumption over time in alignment with state goals.
Additionally, the companies will continue to fix all leaks
in the gas system each year, as has been their practice over the last 20+
years. This is a rare industry best practice that has led to reduced levels of
lost gas, increased safety and reliability, and higher customer satisfaction.
The companies will also fund a study on how the gas business
may change due to the CLCPA and will perform a Renewables Integration Study.
Investments in Aging Infrastructure
The filed settlement reflects a significant investment in
NYSEG and RG&E’s electric infrastructure by investing approximately $550
million (2020-2023) in NYSEG’s Asset Condition Replacement program and
approximately $309 million (2020-2023) in RG&E’s Asset Condition Replacement
program.
As the state continues to face harsh and frequent storms,
and in an effort to reduce the frequency and duration of service interruptions,
the settlement provides for investments of $107 million at NYSEG and $35
million at RG&E’s over the 2020-2023 period to improve the resiliency of
the companies’ electric distribution systems and create a more intelligent and
automated system.
The settlement also calls for increased funding for Electric
Vehicle (EV) infrastructure, improved system capacity equipment and additional
infrastructure improvement programs designed to increase the reliability and
safety of the electric system.
The companies’ commitment to infrastructure investment will
also support significant direct and indirect employment and economic development
throughout the state.
Increased Tree Trimming
As part of the settlement, NYSEG’s distribution tree
trimming funding will increase from $30 million to $57.2 million annually. As
part of that funding, a $17.2 million distribution system program will be
created to focus on trimming areas where trees pose increased risk for outages.
It will also move the company towards the industry standard of trimming all
circuits over a 5-year cycle.
A new annual $10 million (NYSEG) and $1.6 million (RG&E)
danger tree program will be established to address danger trees outside of the
distribution right of way, including but not limited to, ash trees.
Workforce
The settlement adds additional line workers and field
personnel across all regions of the service area, which will increase local
support for storm readiness and system emergencies.
Advanced Metering Infrastructure (AMI) and Billing
System Enhancement
The settlement provides for the implementation of AMI
technology, or smart meters, for all NYSEG and RG&E electric and gas
customers. Smart meters will drive efficiencies, empower customers to better
manage their energy usage, eliminate most estimated bills and promote the
implementation of distributed energy resources. Meter installation will begin
in 2022, with deployment occurring over three years.
As part of the smart meter implementation plan, the
companies will also upgrade billing systems and implement customer energy usage
systems that will provide customers with more granular data about their energy
usage (15-minute intervals for residential customers and 5-minute intervals for
commercial) to allow for better energy management.
Rate and Bill Impact
The settlement represents a three-year agreement between the
companies and the signatory parties and, if approved, will help ensure
customers continue to receive safe and reliable services at rates which are the
lowest or near the lowest in the state.
While the original proposal filed by the companies in May
2019 called for new delivery rates to go into effect in May 2020, the
settlement filed today delays the rate increase for the first rate year from
taking effect until October 2020. The delivery increases for the electric
businesses, which will begin in October of the first rate year are 4.6% at
NYSEG and 2.4% at RG&E, and the bill impact to customers is approximately
2.3% and 1.4% respectively. The monthly bill increase for an average NYSEG
electric residential customer is $2.49. The monthly bill increase for an
average RG&E electric residential customer is $0.37. For both NYSEG and
RG&E, their gas businesses have no delivery increases in the first rate
year.
In rate years two and three, NYSEG electric’s delivery
increase will be 9.1% in each year, with a monthly bill increase of $4.13 and
$5.54, respectively, for the average residential customer. In rate years two
and three, NYSEG’s gas business delivery increase will be 0.8% and 1.6%, with a
monthly bill increase of $0.55 and $1.20, respectively, for the average
residential gas heating customer.
For RG&E customers, electric delivery increases for rate
years two and three are 5.2% in each year, with a monthly bill increase of
$3.82 and $4.14, respectively, for the average residential customer. In rate
year two, RG&E’s average residential gas heating customers will experience
a minimal rate increase of 0.3%, and a 1.3% increase in rate year three,
equating to a monthly bill increase of $0.20 and $0.83, respectively, for the
average residential gas heating customer.
The proposed rate plan settlement is anticipated to go into
effect October 1, 2020.
