New York City, ConEd Storm Hardening and Resiliency Collaborative
The Storm Hardening and Resiliency Joint Agreement demonstrates how community-based organizations can advocate for investments in grid resilience and ensure that investments are made without significant rate increases for low-income customers. Vulnerabilities and inequities in energy infrastructure were exposed following Superstorm Hurricane Sandy in October 2012, which caused significant impacts to New York City’s (NYC) energy system. To protect customers, the region, and energy systems from future natural disasters, Consolidated Edison, Inc. (ConEd) proposed a $1 billion capital investment for years 2013 through 2016 to mitigate impacts of future extreme weather, protect infrastructure, harden energy system components, and facilitate restoration. The utility organized a “Resiliency Collaborative” process to decide on how funds will be spent in their rate application filing. A collaboration of 12 parties including ConEd, city agency officials, and nonprofit and academic stakeholders resulted in a Joint Agreement between state Public Service Commission (PSC), ConEd, and other collaborative parties that froze electric rates for two years and required $1 billion in investment in storm hardening and resiliency. The multi-year rate plans ensure that delivery rates will not increase until after the rate plans have ended. The plan also offers rate mitigation for customers while assuring continued safe and reliable service. The agreement also provides for the expansion of the ConEd low-income discount programs to ConEd’s electric and gas businesses for the benefit of low-income customers.
A rate case is a formal process, conducted by utility regulators, to determine if the utility’s proposed base rates are just and reasonable. The process starts with the utility company filing an application and testimony with the utilities commission. This application includes the total costs to serve customers and the justification as to why current rates are no longer sufficient. After ConEd requested PSC approval for an increase of 8 percent to electric delivery rates, 2.5 percent to gas, and 2.3 percent to steam delivery rates for one year beginning January 2014, among other things, New York State Governor Cuomo sent a letter to the PSC in October 2013, urging them to reject the utility’s request to increase rates. Specifically, the Governor asked the PSC to stabilize rates and ensure utility investments would truly benefit customers. The new joint proposal meets both of these objectives.
In the 2013 rate cases, at the recommendation of the Department of Public Service Staff, ConEd convened a collaborative of interested parties to consider: the Company’s storm hardening proposals and related recommendations, the storm hardening design standard for various aspects of the ConEd’s system, and whether and how climate change impacts should be incorporated into the storm hardening design standard. The Collaborative Parties including, NGOs, consumer advocates, local officials and academics who participated in a series of meetings to exchange and discuss information, ideas, and proposals on many of the resiliency-related issues that the parties presented in testimony filed in the rate cases. In addition to the areas mentioned above, workgroups of the Collaborative discussed and examined the following topics: development of analytical models for risk assessment and cost/benefit analysis of proposed storm hardening projects, examination of alternative resiliency strategies to hardening the grid, including microgrid projects, sited distributed generation, energy efficiency, demand response, and alternative meters; and mitigation of the climate impacts of gas distribution system methane losses. Following the completion of the Collaborative’s deliberations, ConEd filed its Storm Hardening and Resiliency Collaborative Report with the Commission which led to the approval of the joint agreements and was commended by the Commission as an exemplary collaborative effort.
In addition to the customer-friendly rate freeze, other benefits for Con Edison customers include:
- Improving and increasing the discounts associated with the low-income electric and gas programs
- Ensuring quicker reconnections of residential electric service by providing the company resources to expand its capability to reconnect most customers the same day they are eligible for reconnection of service
- Strengthening performance measure targets for customer service
- Expanding performance measure targets for gas safety violations
- City of New York, New York
- Consolidated Edison, Inc. (ConEd)
- Equitable Adaptation Legal & Policy Toolkit > Resilient Energy & Utility Industry Measures > Implementing Equitable Investments in Grid Resilience
- Adaptation plan
- Case study
- Funding program