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Orange And Rockland Utilities Seeks Rate Increases For Myriad Initiatives

Orange and Rockland Utilities at work during Feb. 1, 2021 snowstorm
Courtesy of Orange and Rockland Utilities
Orange and Rockland Utilities at work during Feb. 1, 2021 snowstorm

Orange and Rockland Utilities has filed a rate increase request with the New York state Public Service Commission to take on a number of projects. The company wants to invest in improvements for its electric, gas and clean energy delivery.

On the electric side, O&R proposes a series of initiatives, including, says spokesman Mike Donovan, a $28 million project to underground more key overhead electric lines to protect them from storm damage.

“We’re going to be doing thousands of feet of line, 14 different projects just for that,” Donovan says.

Other initiatives include overhead spacer cable projects, at $5 million for more than 30,000 feet, and grid modernization, with a $16 million price tag to expand automation. O&R plans to expand its tree trimming and removal programs. And the company proposes building two electric substations in Rockland County, one for $51 million in Stony Point, and a $28 million one in New City.

“The thing about the substations, too, now is not only are they a key to service reliability, they also permit us to open up the transmission system to accept more renewable energy into the system,” says Donovan. “The substations are becoming platforms to bring in more solar, more hydro, more wind.”

To fund its proposed electric delivery initiatives, O&R seeks a revenue increase of $24.5 million, which breaks down to an increase of about $6 per month for the average residential customer. On the gas side, the proposal is for about $10 million worth of initiatives, and the average residential customer bill would increase some $8 a month. Richard Berkley is executive director of the Public Utility Law Project of New York, which joins rate cases around the state on behalf of low- and fixed-income New Yorkers.

“It’s too much, and it should be prohibited to be an increase of this level by the Public Service Commission, and especially during COVID,” Berkley says. “It’s not like people have suddenly gotten jobs in the company’s service territory.”

He says investment in safety and reliability and resilience, like storm hardening and tree trimming, makes sense. However:

“The substations… The state started five years ago this thing called Reforming the Energy Vision, it’s a massive statewide reengineering of the system, and one of the, one of the pillars of the REV proceeding, the Reforming the Energy Vision proceeding, was to replace utilities’ building new substations and new physical infrastructure with instead investing in the new technologies, like renewables and storage and demand reduction and things, to avoid making those kinds of massive expenditures where ratepayers will pay for them for decades,” Berkley says.

Donovan is hopeful the COVID-19 curve will have well flattened in a year’s time, rendering a healthier economy.

“This request doesn’t go into effect until next year, so there’s some breathing room here in terms of the economy, the folks getting their lives back to normal,” says Donovan.

And he anticipates that, given the vaccine, there will be a healthier workforce in a year.

“And the community will be ready to accept these kinds of project,” says Donovan. “What we’re trying to do is time this so that we’re going to be looking for a lot of people to go to work on construction projects, when they’ll be ready to go to work.”

Along with O&R’s rate case, the PSC continues its investigation into utility companies’ response to Tropical Storm Isaias in August, having proposed hefty fines for Con Edison, its subsidiary O&R and Central Hudson. Con Edison and O&R are also facing potential license revocation. Berkley, who chairs the Consumer Protection Committee of the National Association of State Utility Consumer Advocates, participated in a procedural conference Tuesday on the next steps in the Tropical Storm Isaias investigation.

“The Isaias investigation is important and will tell us whether the company has spent prudently the money that it has received from its ratepayers before,” says Berkley. “If it has been spending imprudently and on the wrong things, then, obviously, that’s going to affect the rate case because we’re going to try to draw those numbers down, those increases, even further than the company is saying.”

Donovan says O&R also plans to start a five-year joint project with the U.S. Military Academy at West Point.

“It’s going to be a complete overhaul of their electric system from transmission to substations,” says Donovan. “They’ll be eliminating some of the older substations and building new ones. This has been something we’ve been looking at and talking to the Academy about for 10 years.”

There are a number of projects proposed on the gas side.

“We’re going to be replacing 24 miles of pipe. That’s a lot of pipe,” Donovan says. “Over, over the next there years, we’ll be over 65 miles of pipe to be replaced there. These are for liability issues.”

And there are proposed clean energy projects, including s Geothermal Neighborhood Demonstration project, for which O&R is seeking bidders, and an Electric Vehicle Managed Charging program to incentivize EV owners to charge at off-peak hours.

If approved, the new rates for the delivery of both electric and natural gas would become effective January 1, 2022. The PSC last approved a rate increase for O&R that went into effect January 1, 2019 and runs through December 31 this year.

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