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O&R Files New Electric, Gas Rate Proposals
PEARL RIVER, NY Nov. 14, 2014 --- To provide for the continued safety, reliability and security of its electric and gas delivery systems, Orange and Rockland Utilities, Inc. (O&R) today filed electric and natural gas base rate increase requests with the New York State Public Service Commission (NYSPSC). If approved by the Commission, these rates would become effective November 1, 2015.
ELECTRIC DELIVERY RATES
O&R’s electric rate increase request includes initiatives designed to:
To fund these initiatives, O&R seeks an increase in revenues for electric delivery of $33.4 million. This proposed rate increase would become effective on November 1, 2015. The overall bill for a typical residential electric customer using a monthly average of 677 kWh would increase an average of $8.13 per month, from $135.86 to $143.99 or approximately 6 percent.
To ease the impact of the increase resulting from costs associated with the recovery from Superstorm Sandy and increased property taxes, O&R is proposing that it recover both those costs over a five-year period instead of the customary three-year period.
Although today’s filings are for one-year rate agreements, O&R is open to negotiating a multi-year agreement that may result in reducing the monthly bill impact to customers.. For example, under a three-year electric base rate increase agreement, the overall bill for a typical residential electric customer using a monthly average of 677 kWh would increase an average of $6.07 per month, from $135.86 to $141.93, or approximately 5 percent in November 2015. Slightly lower increases may be locked in for the last two years of such an agreement.
Blue Lake Substation – Located on the former site of the King’s College on Long Meadow Road in the Town of Warwick, this $8.8 million substation will serve the new Watchtower Group facility and electric demand in the area, while providing support for the adjacent Sterling Forest, Ringwood and Sloatsburg substations.
Central Rockland Smart Grid - O&R is building a $6.4 million Smart Grid program that will improve electric service reliability for over 25,000 O&R customers in Central Rockland from Chestnut Ridge to West Nyack.
The project also benefits all O&R customers because its implementation allows O&R to defer a major capital investment of $45 million for a new substation and a substantial underground transmission line extension to serve that area. The New York State Energy Research and Development Authority (NYSERDA) is funding $2 million of the project through a grant awarded to O&R to further Smart Grid research and development.
The implementation of AMI also will provide the technology foundation for many of the proposals stemming from New York State’s major initiative aimed at redesigning and modernizing the electric utility industry in New York.
As part of O&R’s efforts to reduce future costs to customers and use technology that will enhance customer participation in shaping their energy future, the Company will be seeking approval of a demonstration program that will provide for an array of targeted energy management initiatives. Those efforts would be aimed at reducing electric demand in the Pomona area of Rockland County. That project, which O&R would administer in partnership with NYSERDA, would provide the opportunity for O&R to postpone a major capital investment of $56 million for a new substation and underground transmission line.
The demonstration program, referred to as the Pomona Project, is proposed to reduce demand in the Pomona area by 5.5 megawatts through a combination of alternative energy management programs that would include the ability for customers to proactively manage their energy use with new tools. In addition, the program plans to utilize innovative solutions such as solar distributed generation and battery storage. The cost of the program would be recovered through a future surcharge.
NATURAL GAS DELIVERY RATES
There has been no O&R natural gas delivery rate increase since November 2011. If the NYSPSC approves this request, it will go into effect on November 1, 2015, the first natural gas delivery rate increase in four years.
If approved, this natural gas rate increase request would go into effect in the winter of 2015-2016 --- not this winter. For this winter, O&R forecasts that the typical residential gas bill will be almost 16 percent lower than last winter, driven by the expected decline in the price of natural gas.
Since 2011, O&R has implemented a number of programs to support and fortify the operation of its natural gas delivery system to continue to provide safe, reliable and clean natural gas service.
O&R’s natural gas rate increase request includes initiatives to:
To fund these initiatives, O&R seeks an increase in revenues for gas delivery of $40.7 million. The overall bill for a typical residential natural gas customer using 100 Ccf per month would rise on average $26.18 per month, from $137.20 to $163.38, or 19.1 percent.
Although today’s filings are for one-year rate agreements, O&R is open to negotiating a multi-year agreement that may result in reducing the monthly bill impact to customers. For example, under a three-year base rate increase agreement, the overall bill for a typical residential natural gas customer using a monthly average of 100 Ccf would increase an average of $15.57 per month, from $137.20 to $152.76, or about 11 percent in November 2015.
COST MITIGATION EFFORTS
To help mitigate cost increases in both the electric and gas sides of its business, O&R has taken a number of steps to manage increases in its labor costs, and has implemented programs to increase workplace productivity and operational efficiencies.
The Company also has redesigned its healthcare plan and increased employee contributions to healthcare --- all to reduce costs. O&R also has replaced its traditional pension plan with a plan for all new employees that will cost customers less over time.
Orange and Rockland Utilities, a wholly owned subsidiary of Consolidated Edison, Inc. (Con Edison) (NYSE: ED), one of the nation’s largest investor-owned energy companies, is a regulated electric and gas utility that serves approximately 226,450 electric customers and 131,460 natural gas customers in New York.
For additional information about O&R, please visit O&R’s Web site at www.oru.com.
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