7/28/2019 Consolidated Edison 2013 Rate Case Q&A

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2013 Rate Case Q&A

Q. What is Con Edison proposing in its rate case filings?   A. Con Edison is proposing new rates for electric, gas and steam for one year, starting inJanuary 2014. The filings seek an additional $375 million in revenue to run the electric system,which would represent an overall customer bill increase of 3.3 percent; an additional $25 million

for gas, resulting in an overall customer bill increase of 1.3 percent; and a decrease of $5 millionin revenue for the steam system.

Q. Why is Con Edison proposing new rates?  A. The electric, steam and gas plans currently in effect are due to expire in 2013. The proposedrate plans call for investments to protect critical equipment from major storms. We have anobligation to invest in our systems so that we can continue to provide safe, reliable service tocustomers.

Q. Will the rate cases cover the entire cost of building storm protection into Con Edison’sinfrastructure?  A. Our filings call for $1 billion in investments through 2016. Those investments could be funded

partly by federal money and/or money from other sources. The investments would cover projects such as reconfiguring some electrical networks to separate flood areas from non-floodareas; placing submersible equipment in flood-prone areas; and strategically placing someoverhead lines underground.

Q. How will these changes benefit customers?  A. We believe they will help minimize the size and scope of outages from major storms andallow us to more quickly restore the customers who lose power.

Q. Why is there suddenly so much emphasis on storm protection? A. It’s clear that weather patterns are changing. Severe storms are becoming more frequentand destructive. In August 2011, Hurricane Irene knocked nearly 204,000 Con Edison

customers out of service. At the time, that was the largest storm-related outage in our longhistory. Just 14 months later, Superstorm Sandy knocked five times as many customers out of service.

Q.  Are you tak ing any s teps to improve your communication with customers andgovernment officials during storms?  A. Yes. We are exploring ways to provide customers with more accurate and timely individualestimated times of restoration, to use text messaging and other mobile communications, and toimprove information flow with officials during storms.

Q. How will the increases affect the typical cus tomer’s bill? A. The typical monthly electric bill for a New York City residential customer (300kWhr) would

rise from $81.64 to $84.55. A typical Westchester residential customer’s (450kWhr), bill wouldrise from $114.41 to $118. The typical bill for a small business (10,800kWhr) would rise from$2,166.59 to $2,225.61.

The typical monthly gas heating bill for a residential heating customer would rise from $187.68to $190.35. Businesses would see an increase from $349.24 to $351.88 per month.

Q. How about steam?  

7/28/2019 Consolidated Edison 2013 Rate Case Q&A

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 A. Steam bills will decrease. For steam service, the company is seeking a decrease of $5million in steam base rate revenues for its customers, all located in Manhattan south of 96th Street. This decrease would come in addition to an estimated $66 million in annual fuel costsavings as a result of the conversion of two Con Edison steam plants from burning fuel oil toburning natural gas.

These delivery rate and fuel cost reductions reflect the company’s proactive approach toreducing steam system costs, and their combined effect is equivalent to an overall decrease incustomers’ bills of approximately 10.1 percent.

Q. Besides the rate filing, are there other factors that will affect customers’ monthlyelectric bill s?  A. Yes. The expiration of certain contracts with non-utility generator units will save customers anestimated $46 million in 2014 and more in future years.

Our customer bills could be further reduced by the scheduled expiration in March 2014 of aspecial surcharge the state imposed on utility customers in 2009, if the surcharge is notextended as recently proposed. Expiration of this assessment would provide an immediate and

direct annual savings to customers of approximately $128 million for electric, gas and steamservice.

Q. Why can’t Con Edison cu t other costs in order to fund the system improvements?Wouldn’t that be better than asking customers to pay more?  A. The company has sharpened its focus on controlling costs. Con Edison has delayed or replaced new capital investments with targeted demand side management programs and workswith customers to reduce their energy usage through energy-efficiency programs. Companyemployees are paying a greater share of their health-insurance premiums, even as health-carecosts rise.

The company has also improved how it prioritizes and manages work. An example is a new

work management program for the Electric Operations organization that is expected to save $45million annually once fully deployed in 2014.

Q. What else should cus tomers know about the proposals on rates? A. The company’s rate filings will be reviewed thoroughly over an 11-month period by the PublicService Commission and other interested parties. While the filings are for one-year rate plans,the company plans to explore with Commission the possibility of multi-year rate plans for electric, gas and steam.