Settlement would provide COVID-19 relief, make investments in infrastructure and affirm commitment to achieve state’s clean energy goals
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BINGHAMTON, N.Y. — June 22, 2020 — NYSEG and RG&E, subsidiaries of AVANGRID, Inc. (NYSE: AGR), today announced that they have filed a proposed rate case settlement with the New York Public Service Commission (NYPSC). The proposed agreement earned support from stakeholders that include customer groups, industry, governmental and environmental interests, with more than 20 parties signing the settlement. News of the filing comes after months of negotiations and after thoughtful discussions with stakeholders about how the companies can best serve customers in light of the COVID-19 pandemic.
“The settlement filed today puts customers first and, upon approval, will provide immediate COVID-19 relief to residential and commercial customers, while also limiting the rate impact to ensure that NYSEG and RG&E customers will continue to have among the lowest electric and gas rates in the state,” said Carl A. Taylor, President and CEO of NYSEG and RG&E. “The proposed plan will enable much needed investment in our infrastructure and harnesses the power of technology to make our electric system more resilient, providing for a better customer experience. It also re-affirms our commitment to build more economic, social and environmentally sustainable communities throughout the areas we serve.”
Details of the settlement include a three-year rate plan that includes the following benefits to customers:
- The settlement provides up to $30 million for COVID-19 relief ($16.5 million for NYSEG and $13.5 million for RG&E) for the companies’ most vulnerable residential and small commercial business customers. The money will be distributed by the companies automatically through $100 bill credits and in three phases, starting in September 2020, pending regulatory approval, with an initial pool of roughly 133,000 residential and small commercial customers.
- The companies will create two new electric economic development programs targeted towards both small and large businesses. A $2 million annual Small Business Customer Program and a $4 million annual Large Business Customer program will be established using funds from the companies’ proposed economic development program to assist businesses that have been impacted as a result of COVID-19.
- As part of the COVID-19 response, the companies will continue to maintain an arrears forgiveness program as part of the Low-Income Program; and institute a more flexible deferred payment agreement program.
Support for New York’s Clean Energy Future
- As part of the settlement filed for NYSEG and RG&E’s gas businesses, the companies agreed to robust measures that maintain the safety of the natural gas delivery system while taking real steps towards helping the state achieve the energy and environmental goals contained within the Climate Leadership and Community Protection Act (CLCPA).
- The companies commit to structure their gas system planning with the objective of achieving a zero-net increase in gas usage. To accomplish this, the companies will promote and incentivize the use of heat pumps and will place increased emphasis on Non-Pipe Alternatives to help reduce natural gas consumption over time in alignment with state goals.
- Additionally, the companies will continue to fix all leaks in the gas system each year, as has been their practice over the last 20+ years. This is a rare industry best practice that has led to reduced levels of lost gas, increased safety and reliability, and higher customer satisfaction.
- The companies will also fund a study on how the gas business may change due to the CLCPA and will perform a Renewables Integration Study.
Investments in Aging Infrastructure
- The filed settlement reflects a significant investment in NYSEG and RG&E’s electric infrastructure by investing approximately $550 million (2020-2023) in NYSEG’s Asset Condition Replacement program and approximately $309 million (2020-2023) in RG&E’s Asset Condition Replacement program.
- As the state continues to face harsh and frequent storms, and in an effort to reduce the frequency and duration of service interruptions, the settlement provides for investments of $107 million at NYSEG and $35 million at RG&E’s over the 2020- 2023 period to improve the resiliency of the companies’ electric distribution systems and create a more intelligent and automated system.
- The settlement also calls for increased funding for Electric Vehicle (EV) infrastructure, improved system capacity equipment and additional infrastructure improvement programs designed to increase the reliability and safety of the electric system.
- The companies’ commitment to infrastructure investment will also support significant direct and indirect employment and economic development throughout the state.
Increased Tree Trimming
- As part of the settlement, NYSEG’s distribution tree trimming funding will increase from $30 million to $57.2 million annually. As part of that funding, a $17.2 million distribution system program will be created to focus on trimming areas where trees pose increased risk for outages. It will also move the company towards the industry standard of trimming all circuits over a 5-year cycle.
- A new annual $10 million (NYSEG) and $1.6 million (RG&E) danger tree program will be established to address danger trees outside of the distribution right of way, including but not limited to, ash trees.
The settlement adds additional line workers and field personnel across all regions of the service area, which will increase local support for storm readiness and system emergencies.
Advanced Metering Infrastructure (AMI) and Billing System Enhancement
- The settlement provides for the implementation of AMI technology, or smart meters, for all NYSEG and RG&E electric and gas customers. Smart meters will drive efficiencies, empower customers to better manage their energy usage, eliminate most estimated bills and promote the implementation of distributed energy resources. Meter installation will begin in 2022, with deployment occurring over three years.
- As part of the smart meter implementation plan, the companies will also upgrade billing systems and implement customer energy usage systems that will provide customers with more granular data about their energy usage (15-minute intervals for residential customers and 5-minute intervals for commercial) to allow for better energy management.
Rate and Bill Impact
The settlement represents a three-year agreement between the companies and the signatory parties and, if approved, will help ensure customers continue to receive safe and reliable services at rates which are the lowest or near the lowest in the state.
While the original proposal filed by the companies in May 2019 called for new delivery rates to go into effect in May 2020, the settlement filed today delays the rate increase for the first rate year from taking effect until October 2020. The delivery increases for the electric businesses, which will begin in October of the first rate year are 4.6% at NYSEG and 2.4% at RG&E, and the bill impact to customers is approximately 2.3% and 1.4% respectively. The monthly bill increase for an average NYSEG electric residential customer is $2.49. The monthly bill increase for an average RG&E electric residential customer is $0.37. For both NYSEG and RG&E, their gas businesses have no delivery increases in the first rate year.
In rate years two and three, NYSEG electric’s delivery increase will be 9.1% in each year, with a monthly bill increase of $4.13 and $5.54, respectively, for the average residential customer. In rate years two and three, NYSEG’s gas business delivery increase will be 0.8% and 1.6%, with a monthly bill increase of $0.55 and $1.20, respectively, for the average residential gas heating customer.
For RG&E customers, electric delivery increases for rate years two and three are 5.2% in each year, with a monthly bill increase of $3.82 and $4.14, respectively, for the average residential customer. In rate year two, RG&E’s average residential gas heating customers will experience a minimal rate increase of 0.3%, and a 1.3% increase in rate year three, equating to a monthly bill increase of $0.20 and $0.83, respectively, for the average residential gas heating customer.
The proposed rate plan settlement is anticipated to go into effect October 1, 2020. Parties supporting the settlement include the staff of the New York State Department of Public Service, Alliance for a Green Economy (NYSEG and RG&E gas cases only), Binghamton Regional Sustainability Coalition (NYSEG and RG&E gas cases only), Bob Wyman, ChargePoint, Inc. (NYSEG and RG&E electric cases only), Concerned Citizens of Oneonta (NYSEG and RG&E gas cases only), Dennis Higgins (NYSEG and RG&E gas cases only), Empire State Development Corporation (the New York State Department of Economic Development), Fossil Free Tompkins (NYSEG and RG&E gas cases only), HeatSmart, a program of Solar Tompkins, Inc. (NYSEG and RG&E gas cases only), IBEW, Local Union 10 (NYSEG electric and gas cases), Keith Schue (NYSEG and RG&E gas cases only), Multiple Intervenors, New York Geothermal Energy Organization, New York Power Authority (NYSEG and RG&E electric cases only), Nucor Steel Auburn, Inc. (NYSEG electric and gas cases only), Ratepayers and Community Intervenors (NYSEG and RG&E gas cases only), Rochester People’s Climate Coalition (NYSEG and RG&E gas cases only), Suzanne Winkler (NYSEG gas case only), Walmart Inc. (NYSEG and RG&E electric cases only).
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About NYSEG: New York State Electric & Gas Corporation (NYSEG) is a subsidiary of AVANGRID, Inc. Established in 1852, NYSEG operates approximately 35,000 miles of electric distribution lines and 4,500 miles of electric transmission lines across more than 40% of upstate New York. It also operates more than 8,150 miles of natural gas distribution pipelines and 20 miles of gas transmission pipelines. It serves approximately 894,000 electricity customers and 266,000 natural gas customers. For more information, visit www.nyseg.com.
About AVANGRID: AVANGRID, Inc. (NYSE: AGR) is a leading, sustainable energy company with approximately $35 billion in assets and operations in 24 U.S. states. With headquarters in Orange, Connecticut, AVANGRID has two primary lines of business: Avangrid Networks and Avangrid Renewables. Avangrid Networks owns eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Avangrid Renewables owns and operates a portfolio of renewable energy generation facilities across the United States.
AVANGRID employs approximately 6,600 people. AVANGRID supports the U.N.’s Sustainable Development Goals and was named among the World’s Most Ethical Companies in 2019 and 2020 by the Ethisphere Institute. For more information, visit www.avangrid.com.
Learn about the Iberdrola Group’s global pandemic response at its COVID-19 Hub.