Sept. 07, 2007

A proposal by Con Edison for an electric  rate increase of more than $1.22 billion is outrageous and should be rejected, County Executive Andy Spano said today. 

“It is unbelievable to me that Con Ed would have the nerve to request this kind of rate increase when it can’t provide reliable service with the outlandish rates it already gets,” Spano said. “Who can forget all the problems we had last summer with outages that lasted for days and affected thousands? Who can forget the unbelievably incompetent way Con Ed handled even its communications with the public? Obviously Con Ed thinks we have forgotten. But our ratepayers have not. Enough is enough.”

The Spano administration has filed testimony with the New York State Public Service Commission, urging it to reject Con Ed’s request for a first-year increase of $1.225 billion to Con Ed’s Westchester and New York City territory, followed by a second and third year increase of an additional $725 million.

Con Ed is the deliverer of electricity to all  Westchester residents and businesses, except those in parts of the northern county covered by New York State Electric & Gas. Con Ed also is the supplier of power to those customers who select it, as opposed to some other company. 

The increase, if approved, would amount to a first-year increase of 33 percent to Con Ed’s delivery charge.

“The magnitude of this rate increase is staggering,” Spano said. “We believe that it is the largest rate increase ever proposed by this company – a company with the highest electricity rates for an investor-owned utility in the continental United States.”

Spano faulted criteria set by the PSC that allows any rate increase at all for Con Ed at this time. “I believe
there should be no increase,” he said. “but even with the current PSC criteria, the proposed increase is outlandish and should be reduced by 80 percent. If they need additional money, let them get it from their stockholders, not from our ratepayers.”

He said that would have no major impact on service reliability or safety and still allow Con Ed to earn a reasonable rate of return, as is required by law.  

In its testimony and transmittal letter to the PSC, the county makes the following points: 

 

• Westchester ratepayers should not be burdened by any additional rate increase until Con Edison can demonstrate that it can provide service to its Westchester customers at just and reasonable rates.
  
• Con Ed already has rates that are the highest of any investor-owned utility based in the continental United States. For 2006, the average retail rate for full-service customers (those who get both supply and delivery) was 19.74 cents per kilowatt hour. In contrast, the rate in northern Westchester served by New York State Electric and Gas was 12.11 cents; and in Rockland, 12.91 cents. 
  
• Westchester electric ratepayers are already burdened with  additional costs built into the rate structure that are unrelated to its demands on the Con Edison system.
  
• While Con Ed describes the first-year increase as an 11.65 percent increase in total electric bills, a more accurate statement is that it represents a 33 percent increase in delivery rates during year one and approximately a 64 percent increase in delivery rates over the proposed three year rate plan. 
  
• The standard long used by the Commission in setting rates is that such rates be “just and reasonable.”  A 64 percent  rate increase over such a short period of time, when general inflation is only approximately 2 percent per year, cannot, by any measure, be considered just and reasonable.
  
• The testimony includes a detailed technical analysis to support Spano’s position.

In the summer of 2006, Westchester experienced several major power outages, some of which lasted for days and left thousands without power. Following those outages,  Spano wrote to the PSC asking for an independent assessment of Con Edison’s performance, infrastructure, communication and other practices. The PSC responded by appointing an auditor, but the county has yet to receive a report.