Public Service Commission limits O&R rate hike to one year

Town and village consortium successful in leading the opposition, By Bob Quinn Albany - The state Public Service Commission has approved a one-year increase in revenues to Orange and Rockland Utilities, Inc. of $26.6 million; the utility had originally requested an increase of $61.7 million. The commission’s decision means that the average residential customer will see a 2.2 percent increase in monthly costs, or about $3. O&R initially filed for a three-year rate increase that would have raised the average monthly bill by $21 by the third year. The decision affects residential, businesses, schools and municipalities. In addition to its impact on all those groups, the decision also is important because of the role of 17 local governments played in fighting the utility’s initial request. This organized opposition, called the Municipal Consortium, included the towns of Chester, Goshen, Monroe, Tuxedo and Warwick and the villages of Chester, Florida, Monroe and Warwick, among others. The towns kicked in $3,000 each, with $1,500 coming from each village. That money was used to hire an attorney to represent them all. The consortium worked cooperatively with the Town of Ramapo and the Utility Intervention Unit of the Division of Consumer Protection of the Department of State (formerly the Consumer Protection Board). “While we are disappointed that the PSC did not accept our complete case that would have eliminated any increase by O&R, we are pleased that the participating towns and villages who supported this effort were able to limit the increase for residents, small and large businesses as well as our fellow municipalities” said Warwick Supervisor Sweeton, who also is the president of the Orange County Association of Supervisors and Mayors. “It is not that we were unhappy with the reliable service O&R provides our residents,” he added, “but we questioned the wisdom of raising electric rates in such a deep and prolonged economic recession.” O&R response O&R spokesman Mike Donovan offered the following statement this week: “The (Public Service) Commission’s decision to increase O&R’s rates came after an intensive nine-month-long process during which O&R’s proposal was scrutinized by PSC experts, examined by municipal interveners and evaluated by the public under the auspices of two administrative law judges. “O&R now needs to have a team of the company’s experts carefully analyze the details of the order implementing today’s PSC decision so that we can formulate a better understanding of that decision’s impact on the company, its operations and its plans.” Transcend municipal boundaries In his remarks, Tuxedo Supervisor Peter Dolan acknowledged the utility of a regional approach to problems or issues that transcend municipal boundaries. “Although I am not 100 percent satisfied with the outcome, I do not regret being a part of this fight and in fact I hope it encourages smaller governments to band together and get involved,” Dolan said. “We are certainly heading in the right direction.” Chester Supervisor Steve Neuhaus, another leader of this effort, added: “I am grateful to the Public Service Commission for listening to the people and cutting O&R’s original rate request. I would like to thank the brave communities who banded together to fight against this unjustified increase. Homeowners and businesses would have been slammed with a massive rate hike but for our efforts. In particular, I’d like to commend my friend, Warwick Town Supervisor Mike Sweeton, for taking the lead on this important fight.” Orders O&R can re-apply for a rate hike in a year. Meanwhile, the Public Service Commission also issued 12 orders, some procedural, others in the realm of programs. Among them are: Orange and Rockland Utilities, Inc. is directed, within 120 days after the issuance of this order, to produce a report detailing its implementation plans for management audit recommendations, with a forecast of costs to achieve and expected savings. If, prior to that deadline, O&R files a new rate case, a preliminary report is to be included with the filing. Orange and Rockland Utilities, Inc. is directed to file a report detailing the results of its Smart Grid pilot program within 90 days after completion of the pilot. Orange and Rockland Utilities, Inc. is directed to develop a proposal for an energy-only street lighting service to be filed with the Secretary and served on the parties to this proceeding no later than Oct. 31, 2011.

It is not that we were unhappy with the reliable service O&R provides our residents but we questioned the wisdom of raising electric rates in such a deep and prolonged economic recession.” Warwick Supervisor Michael Sweeton

Case in point
Here’s how Warwick Supervisor Michael Sweeton explained why the town got involved in the case:
“For the Town of Warwick, in municipal lighting alone, the proposed increase would have been an additional $14,800.
“The regular lighting costs were proposed to increase by 19 to 20 percent on the cost of delivery, which is all O&R controls anymore since you are free to purchase the commodity from whomever you like. “One of our beef’s was that O&R tried to present the increase request based on the delivery, plus the commodity, which showed the increase to be more modest (i.e., 6 to 8 percent). Even this was outrageous in a recession.
“With our successful objections those rates are now at 3.4 percent on delivery and 1.2 percent overall for small commercial like us.”

The organized opposition
The Municipal Consortium, comprised of 17 towns, villages and cities, worked cooperatively with the Town of Ramapo and the Utility Intervention Unit of the Division of Consumer Protection of the Department of State (formerly the Consumer Protection Board) to oppose O&R’s $61.7 million rate increase request last July.
The cost to the towns and cities was $3,000 each and the villages were asked for $1,500 each.
Attorney Dan Duthie presented the consortium’s case before the state Public Service Commission.
Nine towns (eight in Orange County, one in Rockland):
Chester Supervisor Stefan Neuhaus
Deerpark Supervisor Karl A. Brabenec
Goshen Supervisor Douglas Bloomfield
Haverstraw Supervisor Howard T. Phillips Jr.
Highlands Supervisor Edward Magryta
Monroe Supervisor Sandy Leonard
Tuxedo Supervisor Peter Dolan
Warwick Supervisor Michael Sweeton
Wawayanda Supervisor John Razzano
Eight villages (five in Orange County, three in Rockland):
Chester Mayor Phil Vilastro
Florida Mayor James R. Pawliczek Sr.
Haverstraw Mayor Michael F. Kohut
Highland Falls Mayor Joseph E. D’Onofrio
Monroe Mayor James Purcell
Suffern Mayor Dagan LaCorte
Warwick Mayor Michael Newhard
West Haverstraw Mayor John F. Ramundo Jr.
Cities
Middletown Mayor Joseph M. DeStefano
Port Jervis Mayor Russell R. Potter