Con Edison Low-Income Gas Heat Customers to Receive $32 Credit in August

The Con Edison rate changes approved by the PSC in February, including improved low-income rates, became effective on a going forward basis on March 1, 2014.  The Joint Proposal of settling parties approved by the PSC, however, requires a $7.25 discount in the monthly minimum charge and a volumetric discount in the 4 – 90 therm block of $0.4880 per therm as of January 1, 2014, for heating customers.

During the months of January and February 2014, low-income heating customers in the SC-3 class received no discount on the monthly minimum charge and received a smaller volumetric discount in the 4 – 90 therm block of $0.3833, pursuant to the old tariff that was in effect prior to March 1, 2014.  Con Edison  filed a tariff amendment today to provide a one-time credit to low-income customers of $32.72.  “The credit of $32.72 is equal to 1) two months of the $7.25 minimum charge discount plus 2) the difference between the volumetric discount of $0.4880 per therm and $0.3833 per therm applied to 87 therms per month for two months.”

The credit is only for SC3 and SC9 customers, and not SC1 customers who only use gas for cooking, because there was no change in their rate reductions under the rate order.

The $32.72 credit will be applied to August bills, and will be welcome news to many customers struggling to make ends meet.  See Catching Up is Hard to Do – New York’s Utility Customers and the Great Recession.  According to the most recent report on Con Edison’s 166,296 customers receiving the low-income rate, as of March 31, 2014, 64,801 or  39% of them, were behind in paying their bills and owed $41,862,581 to the utility, averaging $646 per customer in arrears.  Although gas bills are low in August for most residential customers, the credit will come at a time when Con Edison bills for electricity, already among the nation’s highest, may be spiking again, due to its volatile pricing mechanism which over-relies on short term spot market prices.  In any event, the credit will help.

The report does not identify the portion of total arrears due to the often much higher charges of ESCOs who sell gas.  Utilities purchase receivables from the ESCOs and collect the higher charges  from customers as charges of the utility itself.  Some ESCOs recruit new customers in low-income areas using high pressure door-to-door sales methods to sell more expensive gas.

Approximately 16,000 of the low-income customers live in Westchester County.

The improvement of the low-income rate, while not as robust as the Utility Project urged, is obviously providing much needed help to some low-income customers struggling to pay the ongoing costs of energy service and, for many, arrears from prior periods.

The number of customers actually receiving the low-income reduced rate, however, is likely far less than the number of eligible customers.This is counter to a general principle of rate regulation that customers should be billed at the rate most advantageous to them.  No doubt many of the one million shutoff notices Con Edison sent to customers so far this year went to customers eligible for, but not receiving, the reduced low-income rate.  Also, eligibility standards are tighter than for other utility reduced rates programs, such as telephone Lifeline.

Con Edison, whose Chairman, President and CEO John McAvoy proclaims to shareholders that the “customer must be at the heart of everything we do,” provides no  information  at its website that we can find advising low-income customers how they may obtain the benefits of the reduced rates for gas or electric service .  See A WELL KEPT SECRET: CON EDISON’S LOW INCOME RATE, August 7, 2008.  Also, a general document search at the New York PSC website for “low-income rates” yielded nothing about how a customer can obtain Con Edison’s low-income rates.

In contrast, California utilities promote their low-income rate programs and even pay community groups to assist in reaching unenrolled customers, while the regulatory commission promotes enrollment of all eligible low-income customers at the proper CARE rate, which provides a 30-35 percent discount on electric and natural gas bills.  California also has a Family Electric Rate Assistance (FERA) program for customers whose income is slightly above the eligibility level for the low-income CARE rates.

Gerald A. Norlander

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