New York update

DEREGULATION UPDATE

New York

Overview

In May 1996, the New York Public Service Commission (NYPSC) issued an order calling for retail competition to begin in early 1998 for all of New York’s residential and commercial customers. The order also required New York’s seven utilities to file restructuring plans with the NYPSC. The following is an overview of each of the utilities’ plans which have now been approved by the NYPSC.

Transition Timetable

Competition in New York’s electric utility industry is being phased in gradually in order to minimize confusion and allow the state’s 7 million electric utility customers to make informed choices. The transition to complete retail competition will be phased in over a period of four years.

Utility First Phase

Central Hudson Gas & Electric   September 1, 1998
Consolidated Edison              June 1, 1998
NY State Electric & Gas             August 1, 1998
Niagara Mohawk                     Fall 1998
Orange & Rockland                     May 1, 1998
Rochester Gas & Electric    July 1, 1998

Central Hudson Gas & Electric

A revised settlement For Central Hudson Gas & Electric was approved by the NYPSC in February 1998. Under the settlement, large industrial customers will receive a 5 percent reduction in rates. Retail access will be phased-in over a three-year period, and stranded costs will be recovered through a competitive transition charge (CTC).

Consolidated Edison

In the fall of 1997, Con Ed’s restructuring plan was approved by the NYPSC. Under the negotiated settlement, all Con Ed customers will be phased into retail choice by 2001. The company will divest at least 50 percent of its generating assets in New York City by 2002, and will be allowed to recover stranded costs during and after the transition period.

New York State Gas & Electric

NYSEG reached a settlement in January 1998 which will bring full competition to all customers by August 1999. Large industrial customers will receive rate reductions totaling approximately 25 percent over a five-year period. NYSEG will auction off all its non-nuclear generation by August 1999 and will recover its stranded costs during and after the transition.

Niagara Mohawk

NiMo’s plan was approved by the NYPSC on March 20, 1998. It will allow all customers to choose their electricity supplier by Dec. 31, 1999. Industrial customers will received rate reductions of approximately 25 percent overall. Stranded costs will be recovered through a CTC.

Orange & Rockland Utilities

Orange & Rockland’s restructuring plan was approved by the NYPSC in the fall of 1997. Full retail access for all customers will be implemented by May 1999. Under the plan, industrial customers will have the opportunity to save up to 12 percent (12.7 percent rate reductions have been provided since 1995). Orange & Rockland will fully recover stranded costs through a CTC.

Rochester Gas & Electric

RG&E’s settlement was approved by the NYPSC, after modifications were made, in January 1998. Under the revised plan, the company will phase-in customer choice, with all customers eligible by July 2001. Commercial and industrial customers will receive up to 10 percent rate decreases. RG&E’s plan contains provisions encouraging it to divest its non-nuclear generation assets within three years, and for recovery of stranded costs through regulated rates during and after the transition period.