Company Cites Rising Equipment Costs and New Area Needs for Infrastructure Improvements & Energy Efficiency Programs
NEW YORK, NY, May 09, 2008 (MARKET WIRE via COMTEX News Network) -- Consolidated Edison Company of New York, Inc. (Con Edison) today
announced that the company is filing new electric rate and investment
plans with the New York State Public Service Commission (PSC) to
begin April 1, 2009.
Adding another phase to the company's EnergyNY plan, the rate
proposal seeks to address the long-term energy infrastructure
investment requirements of New York City and Westchester County, while
establishing new permanent demand-reduction and energy-efficiency
programs. EnergyNY (www.conEd.com/energyny) is Con Edison's
commitment to offer programs and initiatives that will help New
Yorkers go green and keep New York energized by investing in the
area's energy delivery system.
Con Edison's service area peak electric load is expected to grow at
an annual average rate of 1.2 percent over the next five years, after
implementing the company's demand side management (DSM) programs that
help customers reduce their consumption of electricity at the time of
peak use. This growth represents an additional 150 megawatts per
year, the equivalent of powering 150,000 additional homes.
"New energy efficiency programs and increased conservation play an
essential role in our strategy to meet the long-term energy needs of
our customers and to support, in a responsible way, the growth of the
region's economy," said Kevin Burke, chairman and chief executive
officer of Con Edison. "We are working to help our customers manage
their power usage, reducing energy costs in the long term and
improving the environment. Our rate application reflects our
commitment to continue to invest in the long-term future of New York
and to maintain a reliable delivery infrastructure."
While rising oil and natural gas prices are driving up the cost of
electricity produced by power plants, increasing the energy supply
portion of customer bills, the cost of equipment -- substations,
cable, transformers, relay switches and other devices -- is also
rising, resulting in higher electric delivery costs as well.
Con Edison's rate filing today offers two proposals to the PSC. The
first plan seeks $654 million in additional electric delivery
revenues, resulting in a 5.8 percent average increase in total
customer bills (a 15.4 percent increase in delivery charges). Under
the proposal, a typical residential customer paying $78.90 per month
would see an increase of $6.18, or about a 7.8 percent rise (15.9
percent in delivery). A typical business paying $2,338 per month
would see an increase of $120, or 5.1 percent (14.4 percent in
delivery). The proposal also projects a rate increase of 4.2 percent
in the total bill in 2010, and a 3.7 percent increase in the total
bill in 2011.
Con Edison is also proposing an alternative rate plan: a three year
plan that would raise annual revenues by $557 million, increasing
total bills by 4.9 percent in each of the next three years. Under
this proposal, each year a typical residential customer paying $78.90
per month would see an increase of $5.38, or about a 6.8 percent rise
(13.8 percent in delivery). A typical business paying $2,338 per
month would see an increase of $101, or 4.3 percent (12.1 percent in
The company's preference is to secure a three-year rate plan,
providing customers with longer-term certainty in delivery rates,
while ensuring that adequate funds are available to address ongoing
A significant portion of the proposed rate plans is due to increases
in property taxes assessed on the company's facilities.
Con Edison said it was able to mitigate the increase in delivery
costs through measures that reflect greater efficiencies and continued
stringent cost control efforts. Additional steps include financial
adjustments that spread out recovery of previously incurred costs to
future periods, and by recognizing revenues before cash is received.
"We have sought to hold down the requested increase through a number
of cost-saving measures," said Burke. "A safe and reliable electric
delivery system, however, is essential to support economic growth and
development in New York. New building projects and housing require a
dependable energy infrastructure. A multi-year delivery rate plan
will provide some level of stability and certainty to residential and
The filing begins a nearly year-long public review process with the
PSC and interested parties, including consumer groups, environmental
organizations, and local municipalities.
Energy Efficiency Plans
Last month, Con Edison proposed a package of 11 new energy-efficiency
(Energy Efficiency) programs that have the potential to benefit
residential and commercial customers as early as this summer. In this
rate plan, Con Edison is proposing to continue its targeted demand
side management (Targeted DSM) program. The goal of all these
programs is to reduce demand by at least 500 megawatts by 2015,
eliminating the need to build a large power plant and defer
additional infrastructure investments.
The proposed Con Edison programs also support New York state's plan
to reduce electricity consumption by 15 percent, relative to trend,
over the same period. If approved, the programs could reduce carbon
dioxide emissions by an amount equal to taking over 500,000 cars off
New Infrastructure Investments
As part of the company's overall three-year $5.5 billion capital
program to enhance its electric delivery infrastructure, Con Edison
is planning the following investments:
- Construct and energize one new transmission station, three new area substations
-- $633 million;
- Install 3,100 miles of high voltage distribution cable -- $567 million;
- Install 3,000 miles of low voltage distribution cable -- $576 million; --
New/replace/upgrade 16 transmission feeders -- $387 million;
- Install 4,500 distribution transformers and six substation transformers
and equipment -- $957 million; and
- Replace 600 miles of overhead wire, increase overhead reliability for storm
resilience and coastal flood mitigation -- $160 million.
In addition, continued growth in energy demand will require four new
substations to be completed over the next three years, and a total of
10 new substations to be constructed over the next decade.
Higher Equipment Costs
High prices for materials such as copper, steel and cooling oil
continue to drive up the costs of equipment the company uses to
deliver electricity safely to its customers. For instance:
- Copper and steel, which have risen 23 percent and 71 percent respectively
in 2008 alone, have helped to drive the cost of small underground network
transformers to $34,200 today from $26,600 18 months ago.
- The cost of a typical overhead transformer has jumped from $1,600 to $2,200
since April 2007.
- The cost of high-voltage transmission cable increased from $66 per foot
in 2006 to an average of $95 per foot in 2007.
Power Usage in the Home
Con Edison is stepping up educational efforts promoting conservation
for residential customers, who have continued to buy and use a wide
range of appliances powered by electricity. Significant purchases
that are increasing home electricity consumption include:
- Flat screen TVs. Larger flat-screen TVs being purchased today consume two
to three times the power of the smaller, conventional sets they replace. A
42-inch plasma set can consume more electricity than a full-size refrigerator
-- even when that TV is used only a few hours a day.
- Home computers. Between 2002 and 2007, the number of home computers in the
company's service area has grown by more than 650,000. Another 500,000 computers
are expected to be purchased by Con Edison customers by 2012.
- Air conditioners. Customers in the company's service area continue to purchase
additional room air conditioners at a fast pace -- over 1 million in the past
five years. And only slightly less than that number -- about 900,000 additional
units -- are expected to be purchased by Con Edison customers over the next
five years. There are currently more than 6 million room air conditioners
in the company's service area.
The company remains committed to educating the public about the
environmental and economic benefits of energy efficiency and
conservation and will continue to promote increased
energy-conservation awareness among consumers.
Individual customers can achieve meaningful reductions in their
electric bill by taking simple measures, such as using "power strips"
for their TVs and similar appliances, and installing compact
fluorescent light bulbs (CFLs) to slow down the electric meter in
ways that don't affect a customer's lifestyle or involve substantial
More details of the company's filing can be viewed later today at
Con Edison is a subsidiary of Consolidated Edison, Inc. (NYSE: ED),
one of the nation's largest investor-owned energy companies, with
approximately $13 billion in annual revenues and $29 billion in
assets. The utility provides electric, gas and steam service to more
than 3 million customers in New York City and Westchester County, New
York. For additional financial, operations and customer service
information, visit Con Edison's Web site at www.coned.com.
SOURCE: Con Edison Co. of NY, Inc.