Orange & Rockland Utilities Wants To Hike Rates AGAIN! (New York: appointed, calculation)

[Jason_Els]

I know most people loathe their utility companies, but long-suffering Orange & Rockland Utilities, owned by Consolidated Edison, customers know of what I speak. Outrageous costs, Jim Smith, Linda Winikow, and delivery charges that can easily outpace your actual electrical usage.

Orange and Rockland Utilities is seeking its first electric delivery rate hike in 14 years, the utility announced yesterday.

If approved by the New York State Public Service Commission, the increase would go into effect in July 2008. A typical residential customer using 677 kilowatt hours of electricity per month would see an average increase of $12.35, or 10.8 percent, in his or her monthly bill.

The rate hike would provide the utility with an additional $47.8 million in revenue per year, representing a 25.7 percent increase in delivery revenue, according to O&R calculations.

The utility says the money is needed to pay for infrastructure expansion and improvements tied to increasing demand for power. Based on its five-year projections for demand, the utility plans several multimillion-dollar projects in Orange and Rockland counties. Among the projects are new substations in Mount Hope, Goshen and Warwick and substation upgrades or expansions in Monroe, Port Jervis and Sugar Loaf. -Times Herald-Record

The TH-Record, in this (as in many) instance, basically just published O&R's press release verbatim without any comment. Had they done their alleged job of actually reporting they would have found that O&R's rates already outstrip most of the rest of the country. Only utility customers in Connecticut, Hawaii, and Massachusetts pay more than we do.

The New York State Public Protection Board has filed no fewer than four complaints against O&R with the State of New York Public Service Commission since 2005. In complaint case 06-E-0797, the NYSPPB found:

O&R reported on October 30, 2006, that the rate of return on equity for its electric delivery operations, before sharing, was 16.17% for the 12 months ending June 30, 2006, and averaged 15.15% for the three years ending June 30, 2006. These profit levels are far in excess of the Company’s cost of equity and are manifestly not just and reasonable. Moreover, it appears that O&R’s earnings on its electric operations will
increase even further in the future. In addition, despite this overearnings situation, and contrary to the public interest, the carryover provisions of its otherwise expired rate plan permit the Company to defer a litany of costs including for pensions, other postemployment benefits (“OPEBs”), Manufactured Gas Plant (“MGP”) site remediation costs, and research and development costs, for which it will likely seek recovery from ratepayers in the future... As indicated in the O&R Earnings Letter, the Company earned a return on equity for its electric operations before sharing of 13.38%,15.85%, and 16.17% in the twelve month periods ending June 30 of 2004, 2005, and 2006, respectively. Overall, it earned a total of 15.15% in the three-year period, demonstrating a persistent pattern of earnings that vastly exceed what is necessary to meet the PSL’s requirements of safe
and adequate service at just and reasonable rates.

So not only is O&R overcharging ratepayers, but it is asking for even MORE money! Whether this gets passed or not relies upon the New York Public Service Commission, which is chaired by the CEO of Long Island Power Authority (LIPA), a not-for-profit state-owned power utility. If that sounds like a conflict of interest to you, it doesn't to the state of New York. The New York State Ethics Commission decided that the governor- (Pataki) appointed CEO of a power utility also serving as head of the board that decides power utility rate increases does not constitute a conflict of interest .

If New York is called, "The Empire State," it's only because it's as corrupt as Rome.