March 21, 2008

Saying the state regulatory agency had dramatically understated the rate increase it has given Con Edison, County Executive Andy Spano today called upon the Governor and the state Legislature to investigate and conduct public hearings.

“The Public Service Commission issued a press release this week saying it had authorized a $425 million increase in the delivery charges Con Ed can collect. The PSC tried to put a positive spin on its approval of the rate increase by emphasizing that it had rejected Con Ed’s original $1.2 billion proposed increase and that
Westchester residents on average will ‘only’ be paying an added $5.60 a month.

“It turns out that the PSC projection is just plain wrong. It doesn’t calculate how much electricity our homeowners use and then compounds this error by failing to include in this projection an added $250 million that Con Ed is being authorized to collect immediately, pending further PSC review.”

He added “Con Ed gets this added $250 million and may at a later date have to refund it if the PSC decides it was unjustified? Why should our ratepayers have to shell out the money to begin with? And the PSC doesn’t include this $250 million in its calculations of the effect of the rate increase? The public and media have been misled by the commission’s own press release.” 

Spano, in a letter, called on Gov. Paterson and the state Legislature to investigate the rate increase and to hold public hearings.  In the meantime, the rate increase should be delayed, he said.

“This rate increase makes no sense and is unfair to our ratepayers – who already have the highest electric rates in the nation and cannot afford to pay another dime for their electricity,” Spano asserted.

Spano said he was upset for the following reasons:

• The PSC, in claiming it was authorizing a $425 million increase for Con Ed, severely underestimated the effect it would have on Westchester’s electric users by misstating what the average use of electricity is in the county. Westchester residents on average use more electricity than the PSC suggests.
• The PSC did not include it its $425 million calculation the added $250 million it is allowing Con Ed to “temporarily” collect. This further increases the actual cost to ratepayers.

Said Spano, “The PSC’s numbers are so off. First of all, our ‘typical resident’ – if there were such a thing – uses about 650 kilowatt hours of electricity. So that itself understates the projected money increase of  $5.60 wrong. And now with the added $250 million, the actual increase our ratepayers would be hit with is even higher.”

In its press release Wednesday, the PSC stated: “Based on the Commission’s decision, Con Edison’s annual revenues from electric delivery service rates will increase by $425 million effective April 1. The revenue requirement increase of $425 million is estimated to result in bill impacts of about 4.7 percent on a system wide basis. The individual class increases range from 2.9 percent to 8.2 percent on a total bill….The delivery portion of a typical monthly residential bill in Westchester County for 450 kilowatt hours of electricity would increase by about $5.60.”

Later in the release (bottom of page 3 of a 4-page release), the PSC says; “The Commission also determined that Con Edison’s accelerated spending for transmission and distribution capital expenditure under the 2005-2008 rate plan will require additional review. Revenues collected by the company through an adjustment clause totaling $250 million on an annual basis are subject to refund in the event the Commission concludes that any portion of capital expenditures under the previous rate plan is not recoverable in rates.”

From the start, Spano opposed any increase for Con Ed. In January, he brought his concerns directly to the PSC when they held a public hearing in White Plains.

“Residents, who already pay the highest utility rates in the continental United States, should not be forced to finance an increase of historic proportions, especially when Con Edison has not shown that it has addressed serious management deficiencies that were behind a series of extended outages in 2006,” Spano said at the time.