News & Opinion » News

RG&E, NYSEG request 'the largest rate increase in recent history'

By

Rochester Gas and Electric has proposed raising gas and electric delivery rates to a level that could increase its customers’ bills by around 15 percent on average by next year.

But it appears the company will face an uphill battle to get what it wants.

Within hours after RG&E and its sister company New York State Electric and Gas announced that they had filed their request for a rate hike with the state Department of Public Service, Gov. Kathy Hochul issued a scathing statement taking the companies to task.

“It's outrageous and unacceptable that utility companies are proposing the largest rate increase in recent history for more than 1.2 million consumers in upstate New York,” read Hochul’s statement. “The Department of Public Service is legally required to review all proposed rate increases, and I urge them to scrutinize every number and word of this proposal to protect New York families from unjustified and unfair rate increases.”

In the past year, energy prices across the U.S. have skyrocketed by 30 percent — New York is suspending its gas tax starting next week to provide residents some relief at the pump.

The utility companies are calling the proposal “Reliable Energy New York,” and if approved it would:
  • Increase the RG&E electricity delivery rate by 19 percent;
  • Increase the RG&E natural gas delivery rate by 21 percent;
  • Increase the NYSEG electricity delivery rate by 31 percent;
  • Increase the NYSEG natural gas delivery rate by 21 percent.
The average RG&E customer would see a bill increase of $12.95 (15 percent) for electricity delivery and $9.62 (12.8 percent) for natural gas delivery, according to the utility. For NYSEG customers, the increase would be $18.31 (22.2 percent) and $14.94 (15.6 percent), respectively.



The companies have submitted four separate cases for each of the rates, though the Department of Public Service will effectively review them as a whole.

“By this filing, we submit rate cases allowing us to proactively address an increasingly complex energy environment coupled with a pressing need to make important core investments in the grid to support safe and reliable service for customers,” read the cover letter for filings.

The companies justified the proposed rate increases by arguing that they would enable the utilities to, among other things, harden some infrastructure against extreme weather and trim more trees; invest in technology that would improve their grids’ flexibility, efficiency, and ability to incorporate electricity from renewables; and to increase the amount solar and battery storage they can provide customers.

In a cover letter accompanying the submission, Avangrid, the companies’ parent corporation, explained that the rate plan covers only one year and that it would like to reach a multi-year settlement.

“During this process, we will seek to engage in discussions with parties regarding potential multi-year rate recovery of costs to mitigate annual impacts on customers,” read a press release from the utility companies.

Such a settlement was the outcome of the last batch of RG&E and NYSEG rate cases, which were resolved in 2020. The settlement will remain in effect through 2023, at which time the utilities’ newly proposed increase could take effect.

Under the settlement, RG&E’s electricity delivery rate increased by 2.4 percent in the first year, 5.2 percent the second year, and is set to rise another 5.2 percent in the third year, which concludes in mid-2023. RG&E’s natural gas delivery rate stayed flat in the first year of the settlement but rose less than 1 percent in the second year and was set to rise 1.3 percent in the third year.

Rate cases are complex proceedings in which the Department of Public Service seeks to balance the demands of residential, commercial, community, and environmental interests with the utilities investment needs and profit desires.

In its press release, RG&E said the submissions started an 11-month process that will include a review of the filings by the Department of Public Service and other interested parties.

The last time, the Rochester People’s Climate Coalition, now the Climate Solutions Accelerator of the Genesee-Finger Lakes Region, filed responses as an intervenor.

Jeremy Moule is CITY's news editor. He can be reached at [email protected].