[Editor’s Note: This is the second of a series of articles about NYSEG and its request for a rate increase through the Public Service Commission. In this article, contributor Somar Hadid …
[Editor’s Note: This is the second of a series of articles about NYSEG and its request for a rate increase through the Public Service Commission. In this article, contributor Somar Hadid provides an update on the changes to the original joint proposal for a three-year rate increase that NYSEG and the NYS Public Service Commission (PSC) have agreed to. Hadid recaps his recent interview with Michael Jamison, NYSEG’s senior corporate communications manager. The objective of this interview was to hear NYSEG’s response to the concerns expressed from the community about the rate increases and utility services and to give NYSEG an opportunity to convey its message about the situation.]
REGION — The rate increase request initially was over 25 percent. After negotiations, both parties agreed to the six-percent increase over three years, a rigorous schedule of infrastructure improvements, an increased workforce and mitigating climate change initiatives. The approved “joint proposal” involves agreements made for both NYSEG and its sister company, Rochester Electric and Gas (RG&E).
In an interview on December 18, Michael Jamison, NYSEG’s senior corporate communications manager, emphasized the fact that “[more than] 40 parties,” including local politicians, small business leaders and other state groups, were part of the revised agreement. He stressed that this revamped agreement does a lot to help small business owners and local communities.
When asked for specifics, Jamison said that this agreement includes a COVID-19 relief program in which the company would spend $16.5 million on NYSEG to give automatic $100 bill credits for select struggling small businesses and residents during the pandemic. With regards to low-income individuals who are having trouble paying bills, Jamison said that, as part of the deal, the company would allow some struggling consumers to renegotiate terms on a “case-by-case basis.” He also said that NYSEG would allow for bill payment extensions during these difficult times.
A major issue that was raised by local politicians, including Sen. Jen Metzger and Sullivan County Legislative Chair Rob Doherty, was frequent service outages. When asked about these issues, Jamison highlighted that this new agreement provides for increased funding for several aspects of NYSEG’s infrastructure that are designed to reduce such outages. NYSEG has agreed to spend $550 million over three years as part of a replacement program that is designed to “replace old and aging infrastructure.” NYSEG also agreed to spend $107 million on resiliency efforts. The purpose of these resiliency efforts is to “harden the grids against storms” by incorporating bigger and stronger poles and equipment to address harsher and more frequent weather patterns. Jamison noted that “more than 50 percent of all NYSEG’s outages are caused by trees,” and he said that a significant portion of this spending would be incorporated towards vegetation management, where he claims that NYSEG will proactively trims trees throughout the years to avoid trees falling down and causing power outages.
Some critics argue that while NYSEG’s parent company, Avangrid, is investing in its urban natural gas infrastructure, it is simultaneously underinvesting in rural electricity lines. This, critics say, is contributing to the aforementioned service outages around Sullivan County. Jamison countered this saying that, as part of the agreement, RG&E “agreed not to expand natural gas infrastructure” and not to build new pipelines. He also mentioned that Avandrid’s plans to achieve a “zero-net increase” in gas usage . The rate increase took effect on December 1, 2020.
Avangrid is an energy services company that serves about 3.1 million residents across New England. Avangrid itself is partially owned by Iberdrola, a Spanish multinational electric utility company. When questioned as to how being part of a multinational organization can help local residents in rural Sullivan County, Jamison noted that being part of the Avangrid family means increased resources for its consumers. He said that this allows for ”increased boots on the ground” from personnel from sister companies in Connecticut and Maine during urgent times. He also noted that NYSEG is collaborating with its sister companies on technological innovation.
When asked what NYSEG would want to tell its consumers, Jamison claimed that NYSEG customers currently have the lowest electric utility rates in New York state. He also mentioned that the two-percent a year increases will allow NYSEG to make significant investments to improve the reliability of the system.
It remains to be seen if these reported investments will reduce outages and satisfy the local community.
However, the adopted agreement provides benefits to ratepayers by including an earnings-sharing mechanism, various downward-only reconciliation mechanisms and negative revenue adjustments if the companies miss established targets for certain customer service, electric reliability and gas safety performance metrics.