Consolidated Edison Seeks Relief from Negative Revenue Adjustments

Strategic Insights -

Consolidated Edison Company of New York, Inc., the primary gas supplier in the state, has filed a petition with the New York State Public Service Commission (PSC) seeking relief from negative revenue adjustments related to its failure to meet the 2020 main replacement target. The company attributes this failure to the unprecedented COVID-19 pandemic, state-directed mitigation efforts, and challenges associated with ramping up worker availability and productivity back to pre-pandemic levels.

Key Takeaways:

  • Consolidated Edison has requested the PSC to excuse the application of negative revenue adjustments under its Gas Rate Plan for failing to meet the 2020 main replacement target due to COVID-19-related extenuating circumstances.
  • The company has completed only 67 miles of leak-prone main replacement work in 2020, short of the 85-mile threshold in the Gas Rate Plan.
  • Con Edison proposes to amend its cumulative target for the main replacement program to 247 miles, based on the 67 miles completed in RY1 and the 180 miles (90 miles per year) planned for RY2 and RY3.
  • The company argues that achieving the existing 85-mile target in RY2 for penalty avoidance will be a challenge, and completing an additional 16-17 miles is likely not feasible due to ongoing pandemic-related impacts.
  • Con Edison notes that the pandemic has significantly impacted its ability to perform service transfers, with 6 customers unwilling to risk exposure to COVID-19 for non-essential work.
  • The company will continue to monitor pandemic conditions and reserves the right to propose further changes to its cumulative target dependent on the length of the pandemic and its restrictions.

Statistics:

  • 67 miles of leak-prone main replacement work completed in 2020.
  • 85-mile threshold for main replacement work in the Gas Rate Plan.
  • 247 total miles proposed as the amended cumulative target for the main replacement program.
  • 6 customers unwilling to risk exposure to COVID-19 for non-essential work.
  • 90 miles per year planned for RY2 and RY3 to achieve the original cumulative target of 270 miles.

Sources:

  • Case 19-G-0066, Proceeding on Motion of the Commission as to the Rates, Charges, Rules and Regulations of Consolidated Edison Company of New York, Inc. for Gas Service, Order Adopting Terms of Joint Proposal and Establishing Electric and Gas Rate Plans (Issued January 16, 2020).
  • Gas Rate Plan, Appendix 17, p. 4.
  • Executive Order Nos. 202.6 and 202.8.
  • New York State Empire Development Corporation Frequently Asked Questions advice, available at https://esd.ny.gov/sites/default/files/ESD_EssentialEmployerFAQ_033120.pdf.
  • Case 20-E-0155, In the Matter of Interconnection Deadline Modifications, Order Suspending Certain Interconnection Payment Deadlines (Issued and Effective April 6, 2020).
  • Available at: https://esd.ny.gov/guidance-executive-order-2026
  • Available at: https://forward.ny.gov/cluster-action-initiative