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Con Edison Investing in New York's Future
As growth continues in our region, new building projects and housing depend on having a reliable energy infrastructure. Con Edison has an overall three-year $5.5 billion capital program to enhance its electric delivery system. The company will also pursue new energy-efficiency initiatives and conservation programs to reduce demand by at least 500 megawatts by 2015, offsetting the need to build a large power plant. To meet these needs, the company has filed a new electric rate proposal with the New York State Public Service Commission.
News and Information
Following are answers to some of the most frequently asked questions about the proposed rate increase. For more detailed information on the proposal filing, visit Investor Relations.
Frequently Asked Questions
How much of an increase are you asking for?
In our filing, we submitted two proposals. One is a request for an additional $654 million in electric revenues over one year, to become effective in April 2009, representing a 5.8 percent average increase in customers' total electricity bills (a 15.4 percent increase in delivery charges). The proposal also projects a need for a rate increase of 4.2 percent in the total bill in 2010, and a 3.7 percent increase in the total bill in 2011.
The alternate proposal is a three-year plan that would raise revenues annually by $557 million, increasing total bills by 4.9 percent in each of the next three years.
The company’s preference is to secure a three-year rate plan, providing customers with longer-term certainty in delivery rates, while ensuring that adequate funds are available to address ongoing infrastructure needs.
How will this affect customers’ bills?
Under the first proposal, a typical residential customer paying $78.90 per month would see an increase in the first year of $6.18, or about a 7.8 percent rise (15.9 percent in delivery). This compares with an average monthly U.S. residential electric bill of $90 as of 2006 - our customers typically use less electricity. A typical business paying $2,338 per month would see an increase of $120, or 5.1 percent (14.4 percent in delivery).
Under the alternate proposal, a typical residential customer paying $78.90 per month would see an increase in each of the three years of $5.38, or about a 6.8 percent rise (13.8 percent in delivery). A typical business paying $2,338 per month would see an increase of $101, or 4.3 percent (12.1 percent in delivery).
What will the money be used for?
Continued growth in energy demand will require four new substations to be completed over the next three years, and a total of 10 new substations to be constructed over the next decade. Today, the cost of constructing one substation can be between $100 million to $200 million, not including the cost of purchasing real estate.
As part of the company’s overall three-year $5.5 billion capital program to enhance the electric delivery infrastructure, Con Edison is planning to invest $633 million to construct and energize one new switching station and three new area substations; $567 million to install and replace 3,100 miles of high-voltage distribution cable; $576 million to install and replace 3,000 miles of low-voltage distribution cable; $957 million to install and replace 4,500 distribution transformers and six substation transformers and equipment; and $160 million for improved storm response.
The company continues to face higher operating costs. Of the rate amount we are seeking for the year ending March 31, 2010, property taxes represent a considerable portion of the total increase. That is a significant increase, driven in part by the way our utility property is assessed in the property-tax process.
Is the company taking any steps to reduce costs?
The company has worked diligently to hold down the increase in delivery costs, both through measures that reflect greater efficiencies and continued stringent cost-controls, and though financial adjustments spreading costs out to the future.
Nevertheless, higher prices for materials such as copper, steel, and cooling oil continue to drive up the costs of equipment the company uses to deliver electricity safely to its customers. For example, over the past 18 months, the cost of a small underground network transformer has risen to $34,200 today from $26,600 18 months ago. High-voltage transmission cable increased from $66 per foot in 2006 to an average of $95 per foot in 2007.
What steps has the company taken to reduce demand?
In addition to our energy-education program that provides conservation tips for customers, we have several demand-side management and load-reduction programs aimed at reducing load both permanently and at specific critical times. Several thousand customers have programmable thermostats installed in their homes that allow them to control their air conditioners through the Internet. This system also allows Con Edison to remotely adjust those thermostats on very hot days.
Are there energy-efficiency programs included in the rate case?
Last month, Con Edison proposed a package of 11 new energy-efficiency programs (Efficiency Programs) that have the potential to benefit residential and commercial customers as early as this summer. In this rate case, Con Edison is proposing to continue its targeted demand side management (Targeted DSM) program. The goal of all these programs is to reduce demand by at least 500 megawatts by 2015, offsetting the need to build a large power plant.
How do these energy-efficiency programs help keep costs down?
Since 2003, Con Edison’s Targeted DSM program has allowed the company to postpone more than $230 million in capital projects for up to four years. The proposed Con Edison programs also support New York state’s plan to reduce electric consumption by 15 percent over the same period. If approved, the programs could reduce carbon dioxide emissions by an amount equal to taking more than 500,000 cars off the road.
What programs do you have to help people pay their bills?
We have several programs aimed at helping customers pay their bills. The Con Edison EnergyShare Program offers income-eligible customers one-time grants of up to $200 toward their bills. Also, customers who are eligible can also apply for a Home Energy Assistance Program grant through New York state.
In addition to these, Con Edison’s Level Payment Plan helps customers spread their Con Edison payments evenly over the year even when seasonal bills are especially high. We also offer Deferred Payment Agreements to help customers pay out a balance over several months -- a down payment is required and then installments are due each subsequent month in addition to the current bill. Customers who need a little extra time to pay the bill can ask for an extension.
For customers age 62 and over whose Con Edison bills are less than $420 a year, we have the Quarterly Billing Plan. Also, our CONCERN Program (enrollment required if you are age 62 or older, or blind or permanently disabled) gives customers access to specially trained representatives who can advise about government aid programs, provide safety tips, and explain ways to save money on energy bills.
In addition, Con Edison has several convenient and free payment options that save on postage and check fees and that are available to all customers. These include the Direct Payment Plan, our Pay-By-Phone and Online Payment options, and e*bill. Con Edison has many authorized payment agents throughout our service area that accept Con Edison payment free of charge.
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