Central Hudson seeks approval for rate increases in New York

Central Hudson, a Fortis company, filed a plan with the New York State Public Service Commission that proposes to align utility rates with the projected costs to reliably and safely power the region during its term of July 1, 2018, to June 30, 2019.

Michael Mosher, president and CEO of Central Hudson, said in the statement that the investments support increased levels of customer-sited solar power generation and other distributed energy resources; prepares for the anticipated increase in the use of electric vehicles; and helps to reduce customers’ energy use by improving the efficiency of the electric delivery system and by offering energy efficiency incentives, tools, and services.

The rate plan, if approved as proposed, including all available credits from regulatory balances, would raise total average residential electricity bills by about $4.19 per month, or a 3.7 percent increase, based on an average of 560 kWh of electric usage per month and July 2017 market supply costs, the company said, adding that the current average residential electric bill is $112 per month.

“The effect on average residential natural gas heating bills would be $5.54 per month, or a 4.7 percent increase, based on an average of 69 hundred cubic feet of natural gas usage per month and July 2017 market supply costs,” the company said. “The current average residential bill for customers who heat with natural gas is $117 per month.”

The rate plan applies exclusively to delivery charges, the company noted.

As noted in the July 28 filing made with the commission, the tariffs would produce electric and gas delivery revenue increases of $43 million, and $18.1 million, respectively, compared to the revenues approved in Rate Year 3 of the company’s current rate plan.

The company added that drivers of the electric rate increase are predominantly related to distribution and transmission line clearance; growth of capital investment in electrical infrastructure; an increase in the return on equity and a higher equity ratio compared to the prior rate plan; transmission and distribution repair work; information technology expense; and an increase in low-income bill discounts.

On the gas side of the business, the drivers include the continued accelerated replacement of leak prone pipe; increased labor expense; increased information technology expense; an increase in the low-income bill discounts; and an increase in the return on equity and a higher equity ratio in the business, the company said.

Central Hudson said that it has put forth numerous initiatives including:

·      Replacing aging poles and wires with newer and more durable equipment to further storm harden the electric system

·      Using modern technologies to significantly reduce electric service interruptions by automating power flows, and improving the efficiency of the electric system in order to lower customers’ energy use

·      Investing in electric system assets in order to accommodate the proliferation of distributed energy resources

·      Upgrading computer systems to improve cybersecurity; enable utilization of advanced electric grid technologies; and enhance customer offerings of energy efficient products and services

·      Continuing the environmental cleanup of the site of a former manufactured gas plant in Poughkeepsie

Among other things, the company said that on the electric side of the business, the grid is in the midst of unprecedented change as it evolves into a more integrated and complex system. The company said that it continues to invest in its distribution automation, distribution management system, and network strategy as part of its broader plans to transition to a distributed system platform provider.

The gas system major initiatives provide for the continued replacement of leak prone pipe at the pace of about 15 miles per year, the company said, adding that the rate allows it to replace and eliminate all leak prone pipe in 15 years.

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Corina Rivera-Linares, chief analyst for TransmissionHub, has covered the U.S. power industry for the past 10 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics and education for weekly newspapers and national magazines. She can be reached at corinar@pennwell.com .

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