Central Hudson, New York regulatory staff, others file joint proposal regarding company’s proposed rate increases

Central Hudson Gas & Electric on April 18 said that it, New York State Department of Public Service staff, and several parties to the company’s rate proceeding have signed and filed a proposed agreement on future utility investments and operations.

The joint proposal is a part of the regulatory review process for a new rate plan proposed by Central Hudson last July, the company said, adding that the filing was made to align utility rates with the projected costs to reliably deliver energy to the region, as well as to provide critical customer services.

Parties that signed the joint proposal include the Public Utility Law Project of New York, Dutchess County, Pace Energy and Climate Center, the New York Geothermal Energy Organization, Acadia Center, Natural Resources Defense Council, the Utility Intervention Unit of the Department of State, Division of Consumer Protection, and the U.S. Dept. of the Defense representing West Point, Central Hudson said.

The New York State Public Service Commission is expected to rule on the joint proposal this summer, the company noted.

The proposed rate plan covers a three-year period beginning July 2018 through June 2021, and utilizes existing regulatory balances to offset billing impacts for customers during the term of the agreement, as well as projected reductions in federal income tax obligations under the new federal tax plan, Central Hudson said.

Under the joint proposal, Central Hudson would see an electric delivery rate increase of about $19.7m in Rate Year 1 (RY1), with an electric bill credit to customers of $6m, for a net electric increase of about $13.7m; about $18.6m in RY2, with an electric bill credit of $9m, for a net electric increase of about $9.6m; and about $25.1m in RY3, with an $11m electric bill credit, for a net electric increase of about $14.1m.

The joint proposal also noted that the company would see a gas delivery rate increase of about $6.7m in RY1, with a gas bill credit to customers of $3.5m, for a net gas increase of about $3.2m; about $6.7m in RY2, with a gas bill credit of $4m, for a net gas increase of about $2.7m; and about $8.2m in RY3, with a gas bill credit of $4m, for a net gas increase of about $4.2m.

If approved, total average residential electric bills using 625 kWh per month would increase by 1.33%, or less than 5 cents per day, in the first year; 2.99%, or less than 11 cents per day, during the second year; and 4.41%, or less than 17 cents per day, in the third year, the company said in its statement.

Total average residential natural gas bill using 910 hundred cubic feet (ccf) per year would increase by 2.05%, or about 8 cents per day, during the first year; 4.4%, or about 18 cents per day, in the second year; and 5.45%, or about 24 cents per day, during the third year, Central Hudson said.

The increases are based upon January’s market supply prices for electricity and natural gas, the company noted.

Fixed monthly customer charges for residential electric, residential natural gas and small commercial electric customer classes are proposed to be reduced in increments each year during the term of the agreement, Central Hudson said, adding that the proposed return on equity is reduced from the current 9% to 8.8%, and establishes a sharing mechanism with customers for earnings above 9.3%.

According to the statement, Central Hudson President and CEO Michael Mosher said that the joint proposal seeks to enhance system investments that will improve electric service reliability by replacing aging infrastructure and utilizing technologies to reduce electric service interruptions by automating power flows, while bolstering system efficiency to lower customers’ energy use; and natural gas service by continuing the replacement of older mains and services to improve the safety and reliability of the natural gas system.

The proposal also seeks to bolster the existing tree trimming and vegetation management program to further reduce electric service interruptions caused by trees, and to upgrade computer systems to improve cybersecurity, enable utilization of new technologies, and enhance customer offerings of energy efficient products and services, Central Hudson said.

Integral to the proposal is an expansion of existing energy efficiency and carbon reduction programs to protect the environment and help customers reduce their energy consumption, including incentives for air source heat pumps and ground source heat pumps, as well as development of programs to promote the use of electric vehicles, the company said.

Safety initiatives include the development of formal training programs for municipal and county first responders, as well as incentives for customer purchases of home methane detectors, Central Hudson said. Customer Service programs include elimination of fees for bill payments using credit cards and third-party payment centers, and expanded assistance programs for families facing financial difficulties, the company said, adding that the plan also sets required performance metrics for Central Hudson and penalties for non-compliance.

Central Hudson is a Fortis (NYSE:FTS) company. 

About Corina Rivera-Linares 3061 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.