Electric, gas rates will rise for NYSEG, RG&E customers

The price New York State Electric & Gas Corp. customers pay to have electricity delivered to their homes could rise by 23.7% under a rate plan filed with New York regulators Monday afternoon.

The dent in your wallet: $10.17 a month, according to utility estimates, bringing the average bill to more than $53 monthly.

Rochester Gas and Electric Corp. customers will be hit with a smaller increase in electric delivery rates  — 5.4%, $2.86 a month, raising the average bill to about $53 each month.

You’ll be paying more to get natural gas to your home too — 4%,  $1.56 a month for RG&E customers for a total of $43; 1.9%, $1.05 a month to total $56 for NYSEG customers.

In its lengthy submission to the Public Service Commission, the utilities note that the average delivery bill for the average electric customer in both service territories is the lowest of the six investor-owned utilities in New York.

More:NYSEG and Rochester Gas & Electric meters to be replaced within next 5 years. Here's why.

Likewise for gas delivery rates, the utility said; average NYSEG and RG&E natural gas delivery rates are, respectively, $52 and $46 below rates at Central Hudson, which are the highest in the state. 

However, average natural gas delivery rates are $36 in the National Fuel New York franchise area and $49 for National Grid customers, compared with the current monthly totals of $55 and $41, respectively for NYSEG and RG&E.

The current three-year rate plan for NYSEG and RG&E lapsed in April. Both utilities will hold rates stable until May 2020, following an 11-month review process by the PSC.

"Our number one priority is ensuring that all New Yorkers have access to safe, affordable, reliable and clean energy services," said James Denn, PSC spokesman. "Utility rate cases are the forum in which the PSC rigorously assesses proposed rates to ensure they are fair and reasonable. The 11-month public review process will closely review this initial proposal."

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More:NYSEG and Rochester Gas & Electric meters to be replaced within next 5 years. Here's why.

The public will have an opportunity to weigh in on the rate plan during a series of public hearings the commission will schedule sometime during the process in each of the utility's respective service territories.

Driving the increase in NYSEG electric rates is a robust vegetation management program being initiated by the utility.

In a telephone interview conducted Tuesday afternoon, NYSEG and RG&E President Carl Taylor said the utility is making significant investments in its electricity delivery infrastructure and vegetation management to make the system more far more reliable, particularly in violent storms.

"We want to harden and add resiliency in the system," Taylor said. "Our largest reason for outages in NYSEG territory is vegetation, and in storms even more so," adding that the amount of investment necessary in the NYSEG franchise area is larger because of the age of the infrastructure.

Increases in natural gas rates are largely the result of increased operational and management costs, Taylor said.

If the rate request is approved as submitted, the upward adjustment will produce $200 million in additional revenue for the NYSEG and RG&E.

"The companies' filings also achieve the essential balance between the need for investments in electric and gas infrastructure with the important objective of maintaining customer rates that are affordable and among the lowest in New York," the rate filing said.

In the last rate case approved in 2015, NYSEG electric delivery rates increased by 12.8% over the three year term; natural gas 23.5%; RG&E electric rates 11.7%; and natural gas 15.6%, according to securities filings.

Since the restructuring of the electric industry in New York about 20 years ago, NYSEG and RG&E are responsible for the delivery of electricity and natural gas across the service territory. As the only owner of pipes and wires in the territory, they must seek rate approval from regulators.

Supply is not subject to regulation and is now governed by market forces, with customers selecting their own independent company to provide the commodity. However, because of the often convoluted and daunting process involved in choosing an electric supplier, many residential customers have defaulted to the resident utility for electric and natural gas supplies.

The settlement term suggested by NYSEG and RG&E is one year.

"We will entertain settlement discussions" to extend the term, Taylor said.

Also included in the rate case is a plan to install new electric and natural gas meters across 1.9 million installation from 2020 through 2024. NYSEG is currently running a real-time meter pilot project in Ithaca. The so called "smart meters" allow customers to monitor electric usage in real time. But they also introduce the possibility of the future introduction of time-of-use electric prices, in which delivery rates vary depending on supply and demand, with daytime costs higher than night as a way to reduce strain on an already taxed system.

NYSEG has 900,000 electric customers and 260,000 natural gas clients over a patchwork area of New York covering 20,000 square miles, about 40% of the upstate New York region.  RG&E has 375,000 electric connections and 308,000 natural gas customers in a service territory covering 2,700 square miles in a nine county region centered around Rochester..

.The two are subsidiaries of Avangrid, which is a unit of Iberdrola of Spain.

Avangrid reported net income of $595 million on revenues of $6.5 billion in 2018.

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