NYSEG, RG&E delay planned rate increases. Here's why.
Electric and natural gas rate increases for New York State Electric & Gas Corp. and Rochester Gas & Electric Corp. customers are delayed for four months in a move unrelated to novel coronavirus related shutdowns.
State regulators and representatives for the two upstate utilities, both owned by Avangrid, a unit of Iberdrola of Spain, postponed initiating more expensive service while they iron out details of a rate agreement that remains under wraps.
Meanwhile, Gov. Andrew Cuomo ordered a delay on two utility rate increases, scheduled to go into effect April 1.
The order covers 2 million customers statewide. New York American Waterwork's increase will now go into effect in September and National Grid upstate's will go into effect in July.
National Grid increase postponed
The Public Service Commission issued a call this week for other utilities with pending rate increases to delay the actions until the health crisis has lapsed.
However, a consumer group is asking Public Service Commission to scrap the agreement with NYSEG and RG&E entirely and come up with a new ratepayer friendly plan in light of the economic plight throughout the 44-county territory.
In a letter submitted to the Public Service Commission earlier this week, the Public Utility Law Project requested a pause in "settlement discussions and with celerity to provide new and accurate calculations based on the current and future economic impact of COVID-19."
When rate increases have been delayed in the past, utilities have been allowed to collect the total amount of revenues due by pro-rating the charges over the course of the agreement. It's not clear how the delay will ultimately impact ratepayers over the term of the agreement.
NYSEG and RG&E have suspended utility shutoffs for non-payment and waived late payment fees for the length of the public health crisis.
Initial request still being reviewed
Under the proposal submitted last year, the price NYSEG customers pay for electric delivery would rise by 23.7%. The dent in your wallet: $10.17 a month, according to utility estimates, bringing the average bill to more than $53 monthly.
RG&E customers would be hit with a smaller increase in electric delivery rates in the original proposal — 5.4%, or $2.86 a month, raising the average bill to about $53.
“The companies are still discussing the terms of a potential settlement with parties to the case," said Micheal Jamison, Albany-based spokesman for the two utilities. "Additional information will be made public when available.”
It's likely regulators and the utilities reached a compromise on the increases last month, but the exact numbers won't be known until details are released.
Since the restructuring of the electric industry in New York about 20 years ago, NYSEG and RG&E are responsible for the delivery of electricity and natural gas across the service territory. As the only owner of pipes and wires in the territory, they must seek rate approval from regulators.
Balancing the need and supply in New York rate increases
Supply is not subject to regulation and is now governed by market forces, with customers selecting their own independent company to provide the commodity.
However, because of the often convoluted and daunting process involved in choosing an electric supplier, many residential customers have defaulted to the resident utility for electric and natural gas supplies.
NYSEG has 900,000 electric customers and 260,000 natural gas clients over a patchwork area of New York covering 20,000 square miles, about 40% of the upstate New York region.
RG&E has 375,000 electric connections and 308,000 natural gas customers in a service territory covering 2,700 square miles in a nine-county region centered around Rochester.
Jeff Platsky covers transportation and the economy for the USA TODAY Network New York. He can be reached at JPLATSKY@Gannett.com and followed on Twitter: @JeffPlatsky