The New York State Public Service Commission has approved a three-year electric and gas rate plan for Consolidated Edison Company of New York, Inc. (Con Edison), reducing the company’s original request for increased delivery revenues by nearly 90 percent in the first year. The agreement was supported or not opposed by 17 parties, including Con Edison, Department of Public Service staff, consumer advocates, environmental groups, and large industrial customers.
Commission Chair Rory M. Christian stated: “The adopted joint proposal meets the legal requirement that the company continue to provide safe and adequate service at just and reasonable rates. The three-year rate plan is in the public interest. It is a forward-looking plan that benefits customers and includes provisions that further important state and Commission objectives, while keeping customer affordability first and foremost in mind.”
Governor Kathy Hochul directed DPS staff to closely review Con Edison’s initial proposal due to concerns about affordability. As a result, the final joint proposal limits annual rate increases to approximately the rate of inflation while advancing safety, reliability, and climate goals. Con Edison serves more than 3.6 million electric customers and 1.1 million natural gas customers in New York City and Westchester County.
The joint proposal was submitted by 12 parties—including city officials, advocacy organizations, transportation authorities, energy councils—and faced no opposition from several other active participants.
In statements supporting the decision:
City of New York said: “As buildings and transportation electrify and system-wide electricity demand increases, and because of current economic conditions and the critical need to maintain safe and reliable infrastructure, a rate freeze was not possible. The City appreciates that agreement was reached on a joint proposal that recommends rate increases over the next three years that are limited to approximately the rate of inflation, while advancing safety, reliability, and climate goals.”
New York Energy Consumers Council noted: “Significantly, the (joint proposal) incremental revenue requirement for electric represents $5.637 billion less than Con Edison’s initial three-year cumulative incremental increase request, and 26 percent of Con Edison’s initial three-year cumulative incremental increase request… Equally impressive is that the joint proposal incremental revenue requirement for gas is $1.727 billion less than Con Edison’s initial three-year cumulative incremental increase request, and 14.4 percent of Con Edison’s initial three-year cumulative incremental increase ask.”
Environmental Defense Fund commented: “The joint proposal strikes an appropriate balance in significantly reducing Con Edison’s originally proposed rate increase, while still advancing important programs related to clean energy, customer education, and transparency.”
Alliance for a Green Economy added: “The provisions in the joint proposal make the company’s rates more just and reasonable, reduce an operating cost barrier to heat pump adoption… These include… dramatic reduction in proposed bill impacts… improved outreach around the Energy Affordability Program… inclusion of greenhouse gas accounting… improvement of outreach for the company’s energy exchange program which helps customers avoid gas service line replacements by fully electrifying their homes.”
Under this plan, total efficiency savings will reach $156.5 million; non-essential capital projects will be deferred; customer bill discounts will be maintained; enhanced energy affordability policies will be implemented; capital investments are set at about $11.7 billion for electric operations and $2.8 billion for gas operations over three years.
For electric delivery revenues specifically:
– Year one: $234 million increase
– Year two: $409.7 million increase
– Year three: $421.1 million increase
This results in average annual revenue increases of 2.8 percent per year (or a 4.4 percent rise in delivery revenues). For natural gas:
– Year one: $27.5 million increase
– Year two: $68.8 million increase
– Year three: $70.3 million increase
These represent average total revenue increases of 2 percent annually (with delivery revenues up by about 2.8 percent per year). The agreed return on equity is set at 9.4 percent—lower than what Con Edison requested as well as below national averages.
Key drivers behind these rates include property taxes; capital investments needed for maintaining safety—such as replacing leak-prone pipes—and operation costs necessary for running electric/gas businesses.
Public input played a role throughout this process with thousands submitting comments during more than twelve public hearings held both virtually and in person.
Documents relating to today’s decision can be found through www.dps.ny.gov by searching Case Numbers 25-E-0072 or 25-G-0073.
