NYSEG AND THE PSC STAFF SIGN MULTI-YEAR RATE SETTLEMENT AGREEMENT
BINGHAMTON, N.Y., April 8 /PRNewswire/ -- New York State Electric & Gas Corporation (NYSEG) (NYSE: NGE), the staff of the Public Service Commission (PSC), the Independent Power Producers of New York, Inc. and Cogeneration Partners of America today signed a negotiated, 36-month electric and natural gas rate settlement agreement. If the agreement is approved by the PSC commissioners, it will be effective Sept. 1, 1993. "The agreement limits NYSEG's base rate increases in the second and third years of the agreement to a level near or below projected inflation rates and eliminates the cost of formal, litigated rate proceedings," said James A. Carrigg, NYSEG chairman, president and chief executive officer. "It provides the company with necessary rate relief to cover the increasing cost of buying electricity from non-utility generators, rising taxes, and higher operating and maintenance costs." If approved, the agreement will terminate the request filed by NYSEG last November for increases of 5.5 percent in electric rates and 3.6 percent in natural gas rates. The agreement provides for the following increases in revenues and base rates: Effective Date Electric Natural Gas Sept. 1, 1993 $56.5 million $7.6 million 4 percent 2.9 percent Aug. 1, 1994 $44.9 million $7 million 3 percent 2.5 percent Aug. 1, 1995 $45.9 million $7.2 million 2.9 percent 2.5 percent Certain demand-side management (DSM) and natural gas costs currently being charged to customers through the fuel and gas adjustments on their bills would be charged through base rates starting Sept. 1, 1993. This shift of $29 million to electric base rates and $1.8 million to natural gas base rates would not cost customers any additional money. Shifting these existing charges to base rates from the fuel and gas adjustments changes the 1993 base rate increases to 6.1 percent for electric rates and 3.6 percent for natural gas rates. The allowed return on equity would be 11.4 percent for the term of the rate settlement. Any earnings in excess of the allowed return would be shared equally by customers and shareholders. In addition, performance standards for customer service, production cost and how cost effective NYSEG's DSM program is could decrease the allowed return to 10.45 percent or increase it to 13 percent. The agreement resulted from a negotiating process begun last July by the PSC to limit costly rate proceedings. The participants included NYSEG, the PSC staff, the State Consumer Protection Board, the State Attorney General, multiple intervenors -- representing several NYSEG industrial customers -- and more than a dozen other interested parties. The parties discussed concerns, sought solutions and negotiated a settlement. This differs from the traditional approach to ratemaking in which participants litigate issues by presenting testimony to an administrative law judge who recommends a decision to the PSC commissioners for their consideration. In order to stay within the constraints of the agreement, NYSEG has intensified its cost-cutting efforts. Steps already taken to control costs include: -- Refinancing more than $1 billion in debt since 1987. The company's cost of debt has declined from 9.8 percent to 7.6 percent, saving customers $40 million a year. -- Limiting the amount of unneeded and uneconomical electricity the company must buy from non-utility generators by negotiating the termination of, or canceling, power purchase contracts. These actions will save NYSEG customers nearly $1 billion over the terms of the contracts. The agreement would also allow the negotiated rates to be adjusted up or down in the second and third years. The negotiated electric rate increases could be reduced to zero or increased by up to 1.5 percent in years two and three depending on sales and incentives. The negotiated natural gas rates could also be reduced to zero or increased by up to 1 percent in year two and 1.2 percent in year three depending on incentives and the cost of the federal government's effort to deregulate the industry. -0- 4/8/93 /CONTACT: Frank Scollan, media relations coordinator, 607-762-4966, or Clayton Ellis, media specialist, 607-762-4301, both of NYSEG/ (NGE)
CO: New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State Electric & Gas Corporation ST: New York IN: UTI UTI urinary tract infection.
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BM -- CL019 -- 4300 04/08/93 14:17 EDT EDT
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EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York