Consolidated Edison : Electric and Gas Joint Proposal – October 18, 2019

STATE OF NEW YORK

PUBLIC SERVICE COMMISSION

CASE 19-E-0065 - Proceeding on Motion of the Commission as to the Rates, Charges, Rules and Regulations of Consolidated Edison Company of New York, Inc. for Electric Service.

CASE 19-G-0066 - Proceeding on Motion of the Commission as to the Rates, Charges, Rules and Regulations of Consolidated Edison Company of New York, Inc. for Gas Service.

JOINT PROPOSAL

October 16, 2019

		TABLE OF CONTENTS
			Page
Procedural Setting................................................................................................................	2
Overall Framework..............................................................................................................	5
A. Term...........................................................................................................................	5
B. Rates and Revenue Levels........................................................................................	6
1.	Electric ...............................................................................................................	6
	a.	Supply and Supply-related Charges and Adjustments, Monthly
		Adjustment Clause and NYPA Surcharge ................................................	6
	b.	Revenue Decoupling Mechanism ("RDM").............................................	9
	c.	PJM OATT Charges ...............................................................................	10
	d.	Other Charges .........................................................................................	11
	e.	Tax Cuts and Jobs Act of 2017 ("Tax Act")...........................................	11
	f.	Business Cost Optimization ("BCO") and Productivity.........................	12
	g.	Pension/Other Post Employment Benefits ("OPEBs")...........................	12
2.	Gas ...................................................................................................................	13
	a.	Revenue Decoupling Mechanism ...........................................................	14
	b.	Gas Cost Factor / Monthly Rate Adjustment..........................................	14
	c.	Non-Firm Revenues................................................................................	17
	d.	Lost and Unaccounted For Gas...............................................................	19
	e.	Other Charges .........................................................................................	21
	f.	Oil-to-Gas and Area Growth Conversion Programs Discontinued ........	22
	g.	Tax Cuts and Jobs Act of 2017...............................................................	22
	h.	Business Cost Optimization and Productivity ........................................	23
	i.	Pension/OPEBs.......................................................................................	23
C. Computation and Disposition of Earnings ...........................................................	23
1.	Earnings Sharing Threshold.............................................................................	23
2.	Earnings Calculation Method ..........................................................................	24
3. Disposition of Shared Earnings .......................................................................	25
D. Capital Expenditures and Net Plant Reconciliation ............................................	26
1.	Electric .............................................................................................................	26
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	a.	Net Plant Reconciliation .........................................................................	26
	b.	Reporting Requirements .........................................................................	28
	c.	Non-Wires Alternative ("NWA") Adjustment Mechanism....................	28
2.	Gas ...................................................................................................................	30
	a.	Net Plant Reconciliation .........................................................................	30
	b.	Reporting Requirements .........................................................................	32
	c.	NPA Adjustment Mechanism .................................................................	32
3.	AMI..................................................................................................................	34
	a.	Net Plant Reconciliation .........................................................................	34
	b.	Reporting Requirements .........................................................................	35
4.	New Customer Service System ("CSS") .........................................................	35
	a.	Net Plant Reconciliation .........................................................................	35
	b.	Stakeholder Meetings .............................................................................	35
	c.	Reporting Requirements .........................................................................	35
5.	Additional Common Capital Reporting ...........................................................	36
E. Other Deferral Accounting and Reconciliation Mechanisms .............................	36
1.	Property Taxes (Electric and Gas) ...................................................................	36
2.	Pensions/OPEBs (Electric and Gas) ................................................................	37
3.	Environmental Remediation (Electric and Gas) ..............................................	38
4.	Non-Officer Management Variable Pay (Electric and Gas) ............................	39
5.	Adjustments for Competitive Services (Electric and Gas) ..............................	39
6.	East River Major Maintenance Cost Reserve (Electric) ..................................	39
7.	East River Interdepartmental Rent (Electric)...................................................	40
8.	Other Transmission Revenues (Electric) .........................................................	40
9.	NEIL Dividends (Electric)...............................................................................	40
10.	Brownfield Tax Credits (Electric) ...................................................................	41
11.	Proceeds from the Sales of SO2 Allowances (Electric)...................................	41
12.	BQDM Program and REV Demo Project Costs (Electric)..............................	41

13. Municipal Infrastructure Support (Other Than Company Labor)

	(Electric and Gas) ............................................................................................	42
14.	Long Term Debt Cost Rate (Electric and Gas)................................................	43
15.	Energy Efficiency ("EE") (Electric and Gas) ..................................................	44
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16.	CSS O&M (Electric and Gas)..........................................................................	45
17.	Sales and Use Tax Refunds 2019 (Electric and Gas) ......................................	45
18.	Taxes on Health Insurance (Electric and Gas).................................................	46
19.	Congestion Tolling Program (Electric and Gas)..............................................	46
20.	Prevailing Wage Law (Electric and Gas).........................................................	46
21.	NYC Local Law 97 (Electric and Gas)............................................................	46
22.	NWA (Electric)................................................................................................	47
23.	Major Storm Cost Reserve (Electric)...............................................................	47
	a. Major Storm Reserve Funding................................................................	47
	b. Costs Chargeable to the Major Storm Reserve.......................................	48
24.	SmartCharge Program (Electric)......................................................................	50
25.	NY Facilities Agreement (Gas) .......................................................................	51
26.	Research and Development Expense (Gas) .....................................................	51
27.	Pipeline Safety Acts (Gas) ...............................................................................	51
28.	Gas Service Lines (Gas)...................................................................................	52
29.	White Plains Gate Station (Gas) ......................................................................	52
30.	Additional Reconciliation/Deferral Provisions................................................	52
31.	Discontinued Deferrals/Reconciliations ..........................................................	53
	a.	World Trade Center (Electric and Gas) ..................................................	53
	b.	System Peak Reduction (Electric) ..........................................................	53
	c.	Energy Efficiency (Electric and Gas) .....................................................	53
	d.	Electric Vehicles - O&M (Electric) ........................................................	53
	e. Pipeline Integrity Costs - New York Facilities Charges (Gas) ..............	54
F. Additional Accounting Provisions.........................................................................	54
1.	Depreciation Rates and Reserves.....................................................................	54
	a. Depreciation Rates (Electric and Gas)....................................................	54
	b. Reserve Deficiency (Electric and Gas)...................................................	54
2.	Interest on Deferred Costs ...............................................................................	55
3.	Prospective Property Tax Refunds and Credits ...............................................	55
4.	Prospective Sales and Use Tax Refunds/Assessments ....................................	56
5.	Income Taxes and Cost of Removal Audit ......................................................	56
6.	Allocation of Common Expenses/Plant...........................................................	57
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	7.	Allocation of Intercompany Shared Services Expense....................................	57
G.	Electric Revenue Allocation/Rate Design and Tariff Changes...........................	58
	1.	Revenue Allocation..........................................................................................	58
	2.	Rate Design......................................................................................................	58
	3.	Customer Charges and Billing and Payment Processing.................................	59
	4.	Competitive Metering ......................................................................................	59
	5.	High Tension / Low Tension Differentials ......................................................	59
	6.	Optional Demand-Based Rate..........................................................................	59
	7.	Tariff Changes .................................................................................................	60
H.	Gas Revenue Allocation/Rate Design and Tariff Changes..................................	68
	1.	Revenue Allocation..........................................................................................	68
	2.	Rate Design......................................................................................................	68
		a.	Firm Delivery Rates:...............................................................................	68
		b.	Interruptible Service: ..............................................................................	70
		c.	Gas Balancing .........................................................................................	70
		d.	Tariff Changes ........................................................................................	71
I.	Performance Metrics ..............................................................................................	75
J.	Customer Energy Solutions Provisions.................................................................	75
	1.	EE Programs ....................................................................................................	75
		a.	EE Stakeholder Forums ..........................................................................	76
		b.	Coordination with New York City Retrofit Accelerator ("RA")
			Program...................................................................................................	76
		c.	Interruptible Gas Customers ...................................................................	76
		d.	LMI Customers .......................................................................................	76
		e.	Measurement and Verification ("M&V") Efforts...................................	78
		f.	Heat Pump Demand Pilot .......................................................................	78
		g.	Smart Kids ..............................................................................................	78
	2.	Earnings Adjustment Mechanisms ("EAMs").................................................	79
			EAM Reporting Requirements ...............................................................	81
	3.	Electric Vehicles ..............................................................................................	81
			Smart Charge New York.........................................................................	81
			Make Ready Infrastructure .....................................................................	83

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