Orange and Rockland Utilities (O&R) on Friday, Jan. 26 requested a regulatory review of its electric and natural gas delivery rates by the New York State Public Service Commission (NYSPSC).
In a press statement, O&R President and CEO Robert Sanchez said, “Today’s rate review request is designed to meet the demands of a dynamic energy marketplace where customers desire more control over their energy usage and expect a more reliable and resilient system. This request achieves those goals.”
Rockland County Executive Ed Day immediately questioned the timing and need for the rate increase. “Anybody in charge of an organization understands that costs do go up but I find it extremely troubling that at the same time the federal corporate tax rate is dropping they are increasing the costs to our consumers," Day said.
"That should warrant extreme scrutiny by the PSC,” Day said. “The savings from Orange and Rockland’s reduced tax burden should be passed along to their customers.”
O&R seeks an increase in revenues for electric delivery of $20.3 million. Under the proposed rate increase, the bill for a typical residential electric customer using a monthly average of 600 kilowatt hours would rise an average of approximately $6 per month from about $122 to $128.
O&R also is seeking an increase in revenues for gas delivery of $4.5 million. If approved, those rates would become effective in January 2019. Bills for a typical residential natural gas customer using 100 Ccf per month would increase about $4 per month from about $134 to $138.
According to the utility company, the revenue increases to fund both the electric and natural gas delivery proposals in this rate review request were mitigated by the recently enacted federal tax code changes that reduced O&R’s corporate income tax rate from 35 percent to 21 percent.
O&R will realize a tax savings under its current energy delivery rate structure from the time the new federal corporate tax rates became effective until January 2019 when new O&R energy delivery rates are due to go into effect. O&R will defer the federal corporate tax savings from that period as a customer benefit. The NYSPSC is expected to decide the amount, manner and timing of that customer benefit’s return to customers.
To further improve future customer experience and increase customer engagement, O&R plans to install 230,000 electric smart meters and 130,000 smart gas modules in its New York service area by 2020.
O&R also is planning to improve efficiency, reliability and resilience in its system through the construction of new electric substations in Stony Point, Port Jervis and New City.
O&R’s natural gas rate review request includes initiatives to:
- Enhance gas safety by replacing 22 miles of aging pipe per year
- Provide greater safety in the operation of the natural gas delivery system through increased deployment of inspectors to job sites, video confirmation of pipe location and increased outreach to excavators.
- Under O&R’s planned efforts to continue gas main replacement, the company is on track to remove all low pressure gas systems, which includes all aging cast-iron mains, by 2019 --- a major milestone for O&R.
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