Understanding the Rate Case Process in NY

I find comfort in the regulatory process in NY, as it targets an equitable outcome for diverse priorities and all stakeholders. At times, there are competing interests from customers, communities, environmental advocates, consumer advocates, employees, and shareholders. However, the goal remains the same - to provide safe, reliable, and affordable service while being good stewards of New York’s energy networks, considering the impacts of our actions on future generations, and being a responsible community leader and partner.

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To achieve these goals, we have set five key priorities:

1.?????? Enable the energy transition for all society: We are committed to facilitating the transition to cleaner and more sustainable energy sources, ensuring a greener future for everyone.

2.?????? Build tomorrow's workforce today: We recognize the importance of investing in our workforce, equipping them with the skills and knowledge needed for the evolving energy landscape.

3.?????? Deliver for our customers: Our focus is on meeting the needs and expectations of our customers, providing them with reliable and efficient service.

4.?????? Build the networks of the future now: We are dedicated to developing and enhancing the infrastructure necessary to support the energy needs of today and tomorrow.

5.?????? Operate safely and efficiently: Safety is our top priority, and we strive to operate in a manner that ensures the well-being of our employees, customers, and communities while maintaining efficiency.

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One crucial aspect of the regulatory process is the rate case, which is a formal process that regulates the rates utilities charge customers for electricity, natural gas, water, and steam. Let's take a closer look at how rate cases work and why they are important:

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Why Rate Cases are Important: Utility regulators are responsible for ensuring that utilities provide reasonable, adequate, and efficient service to their customers at just and reasonable rates. Regulation also protects consumers from the monopoly power of utilities.

How Rate Cases Work: The rate case process involves several steps, which include:

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1.?????? Company Testimony: Utilities file a request to increase rates with the New York Public Service Commission (PSC), providing information on how they plan to address infrastructure investments, property taxes, depreciation, and customer service, among other areas.

2.?????? Discovery, Corrections, and Updates: The process typically involves initial company testimony from witnesses, followed by discovery, corrections, and updates to the filed information.

3.?????? Staff and Intervenor Testimony: Once the initial testimony is filed, Staff and Intervenor Testimony may be submitted, providing additional perspectives and insights.

4.?????? Rebuttal: Utilities have the opportunity to respond to the Staff and Intervenor Testimony through rebuttal testimony.

5.?????? Settlement Negotiations or Evidentiary Hearing: Parties may enter into confidential settlement negotiations based on the filed testimony, or an evidentiary hearing may be conducted on all filed testimony.

6.?????? Joint Proposal: If parties enter into settlement negotiations, the outcome is typically a joint proposal that specifies rates the utility will charge, as well as the investments and programs the utility will implement, over the term of a multi-year rate plan, often spanning three years. Parties can support, oppose, or be neutral on the joint proposal.

7.?????? Statements and Evidentiary Hearing: Parties supporting or opposing the joint proposal file statements within the scheduled timeline established by the administrative law judge. An evidentiary hearing is often held on the joint proposal.

8.?????? Commission's Decision: Ultimately, the PSC issues an order adopting the terms of the joint proposal, occasionally modifying some terms, or, alternatively, makes a decision based on filed testimony and an evidentiary hearing.

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The PSC Decision and Public Involvement: The PSC must make a decision on a rate case within 11 months of the filing date, but the process can be extended to allow for settlement negotiations. The process is open to the public, and interested parties can intervene and become part of the case. Large energy consumers, public interest groups, municipalities, and representatives of low-income customers are among those who typically intervene.

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Equitable Outcomes for All: Throughout the rate case process, the goal is to ensure equitable outcomes for all stakeholders. This includes procedural equity, which provides necessary information and meaningful opportunities for stakeholders and communities impacted by resiliency projects. Distributional equity ensures that resiliency planning drives equitable outcomes, distributing benefits and burdens fairly. Structural equity recognizes historical, cultural, and institutional dynamics and structures to avoid perpetuating advantages for privileged groups. Lastly, transgenerational equity considers the impact of decisions on future generations, ensuring they are not burdened unfairly.

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Understanding customers and responding to their ever-changing needs is at the heart of a successful business. By engaging in the rate case process, utilities strive to meet these needs while considering the interests of all stakeholders and building a sustainable future.

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