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RELEASE: PSC announces higher than normal electricity prices this summer because of rising natural gas prices, and issues rules to further restrict use of natural gas in NYS to heat buildings and generate electricity.
NYSNYS News

For Immediate Release: 05/12/2022

Rory M. Christian, Chair

Contact:

James Denn | James.Denn@dps.ny.gov | (518) 474-7080
http://www.dps.ny.gov
http://twitter.com/NYSDPS





22044 / 22-E-0139; 22-E-0150

May 12, 2022
Average Summer Residential Electric Prices Expected to be Higher Than Normal


Electric Supply Price Increases Attributed to Global Increase in Natural Gas Prices

Peak Summer Demand for Electricity Continues to Fall Due to Energy Efficiency Efforts

ALBANY — The New York State Public Service Commission (Commission) today announced that New York’s electric grid and its electric utilities are prepared for increased summer demand for electricity. However, the price for electricity paid by full-service residential customers on average is expected to be higher than a year ago, depending on demand and weather conditions.

“New York, like every other state, continues to experience higher than normal commodity prices compared to where prices were several years ago, and that is expected to continue throughout the coming summer,” said Commission Chair Rory M. Christian. “Because of an expected increase in generator fuel costs as well as the changes in capacity prices and obligations, residential and commercial customers may experience higher commodity bills this summer than last.”

There are many factors that are forcing prices higher, most notably higher demand due to a robust economy and price increases due to international uncertainty regarding energy supplies, two critically important factors that are both outside of the control of the Commission. Given those factors, the Commission works tirelessly to mitigate price increases in areas that are within its control, including Commission-ordered programs to lower demand. The Commission also requires the utilities to mitigate volatility in prices, which will help to ensure price stability for consumers. Further, the Climate Leadership and Community Protection Act has aggressively put New York State on a path of greater renewable energy, which will significantly reduce dependence on fossil fuels and lessen price increases related to fossil fuel volatility.

As a result of a rapidly rebounding economy, electric energy market price futures are up in all zones compared to last summer when New York experienced an economic downturn. Overall, the Statewide average residential full-service commodity rate is expected to be about 12 percent higher than last summer, but may vary depending on the customer’s location in the State.

This increase is consistent with increases that have occurred over each of the last two summers of approximately 11 percent per year, and would be a return to 2014 price levels after the recent period of low supply prices. The electric supply price increase can broadly be attributed to the global increase in natural gas prices.

In the summer of 2013, New York State set an actual record peak load of 33,955 MW. Peak load this summer is forecast to be of 31,765 MWs, slightly lower than last year’s actual peak of around 31,000 MWs. Installed generating capacity for 2022 totals 37,537 MW. Combining the installed generation capacity with other resources provides New York with a total of 41,166 MW worth of capacity resources for 2022, well above what is the expected need.

Thanks to energy efficiency and system improvements, the current peak forecast for 2026 is about 2,000 MW less than its 2016 forecast. By 2032, the combined effect of the energy efficiency and demand reduction programs are projected to help lower the peak demand by over 6,400 MWs. A 2,000 MW decrease in peak demand is the equivalent of the electricity generated by several large power plants, enough to supply approximately 1.75 million average-size homes. Reducing the amount of electricity that’s consumed daily and during the hottest days of summer provides significant benefits to consumers and the environment.

To further help curb peak energy system demands, each of the utilities have load relief programs in which customers are compensated for providing load reductions when called upon. Currently there is an estimated 1,100 MW enrolled in these programs for 2022 to further facilitate peak demand reductions during the summer’s hottest days. The Commission and other State agencies have very active programs designed to reduce the impact of high utility bills on low-income customers.

In a related action, the Commission modified the process by which Consolidated Edison Company of New York, Inc. (Con Edison) accounts for costs related to the purchase of the electricity it supplies to customers. As a result of this change to its electric supply cost recovery mechanism, or MSC, Con Edison will now calculate the energy component of the MSC using forecasts of energy prices each month along with estimates of associated hedging impacts.

The reason for the change is to reduce the likelihood of significant customer bill volatility during the coming summer season. These changes better align Con Edison’s supply purchase process with nearly all other large electric utilities in New York. This is important because the other large utilities experienced significantly less full-service mass-market bill volatility this winter season.

Today’s decisions may be obtained by going to the Commission Documents section of the Commission’s Web site at www.dps.ny.gov and entering Case Numbers 22-E-0139 [Summer Preparedness] and 22-E-0150 [Con Edison tariff] in the input box labeled "Search for Case/Matter Number". Many libraries offer free Internet access. Commission documents may also be obtained from the Commission’s Files Office, 14th floor, Three Empire State Plaza, Albany, NY 12223 (518-474-2500). If you have difficulty understanding English, please call us at 1-800-342-3377 for free language assistance services regarding this press release.

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For Immediate Release: 05/12/2022

Rory M. Christian, Chair

Contact:

James Denn | James.Denn@dps.ny.gov | (518) 474-7080
http://www.dps.ny.gov
http://twitter.com/NYSDPS





22043 / 20-G-0131

May 12, 2022
PSC Begins Groundbreaking Planning Process to Reduce Greenhouse Gas Emissions from the State’s Natural Gas Delivery System


Commission Sets Forth Rules Regarding Potential Natural Gas Moratoriums

ALBANY — The New York State Public Service Commission (Commission) today adopted gas planning procedures that will result in plans being submitted by natural gas utilities that comply with the State’s greenhouse gas emission reduction goals. The Commission also adopted new rules that set forth the process for initiating, operating, and lifting a natural gas moratorium.

“The gas planning procedures we are adopting today will ensure that gas utilities continue to provide safe, adequate, and reliable service while striving to meet the State’s greenhouse gas emissions reduction targets,” said Commission Chair Rory M. Christian. “Furthermore, our new procedures will allow for enhanced stakeholder engagement by creating opportunities for timely and meaningful input to ensure all voices and positions are heard.”

Modernizing the gas planning procedures is important so that local gas distribution companies’ long-term plans are subjected to transparent review and ensure that they conform to State policies while ensuring that the gas utilities can continue to provide safe and adequate service. This critically important gas planning proceeding has been in the works for more than two years; numerous parties, including those representing large customers, environmental advocates, individuals, and the affected local gas distribution utilities have filed comments. Staff held a stakeholder conference to discuss the proposal on March 25, 2021, and public statement hearings were held in May 2021.

Going forward, utilities will be required to make filings with proposed long-term plans every three years. The filings must include at least one scenario with no new traditional gas infrastructure and quantify greenhouse gas emissions. Each filing will begin a stakeholder engagement process, aimed at developing a consensus long-term plan. Utilities will also be required to provide annual updates to their long-term plans. Additional phases of this proceeding will deal with issues such as the avoided cost of gas, depreciation, and statutory/legal changes necessary to ensure greenhouse gas emissions reductions.

In a related decision, the Commission today adopted new rules that set forth the process for initiating, operating, and lifting a natural gas moratorium, and covers issues including the metrics used to identify supply shortfall, communications, a Customer Bill of Rights, training materials and outreach, and information on low- and moderate-income customer and disadvantaged community impacts.

These new rules are important given the fact that in certain areas of the State, gas distribution utilities are already operating under moratorium conditions based upon natural gas supply constraints, and such circumstances may reoccur in the future. Accordingly, moratoria management procedures should be implemented expeditiously in the event of additional moratorium enactment or rescission.

By providing a uniform, transparent, and streamlined process for the initiation, operation, and lifting of a natural gas moratorium, the Commission can minimize impacts to customers while ensuring safe and adequate utility service. Recent experience with moratoria in various gas utilities’ service territories demonstrates the need to have clear procedures in place should moratoria be deemed necessary in the future. The moratorium management procedures adopted today will ensure that customers throughout the State understand when, where, and how a natural gas moratorium may be imposed, and will provide details and a Customer Bill of Rights to ensure that all moratoria are invoked, managed, and released in a fair, equitable, and transparent manner for all consumers, including underserved and disadvantaged communities.

Today’s decision may be obtained by going to the Commission Documents section of the Commission’s Web site at www.dps.ny.gov and entering Case Number 20-G-0131 in the input box labeled "Search for Case/Matter Number". Many libraries offer free Internet access. Commission documents may also be obtained from the Commission’s Files Office, 14th floor, Three Empire State Plaza, Albany, NY 12223 (518-474-2500). If you have difficulty understanding English, please call us at 1-800-342-3377 for free language assistance services regarding this press release.

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