The New York State Public Service Commission (PSC) on Wednesday authorized Consolidated Edison Co. (Con Edison) to expand a natural gas efficiency program in its service territory to prepare for the 2007-2008 winter heating season.

According to the PSC, the program, budgeted at $14 million, is expected to have a "relatively small impact" on Con Edison's customers, representing less than a 2% increase in delivery revenues and less than a 1% impact on total bills.

"Natural gas efficiency programs are more important than ever to determine ways to reduce customers' natural gas usage for heating and other purposes," said PSC Chair Patricia L. Acampora. "The funding for Con Edison's important efficiency program makes perfect economic sense because it provides a way to decrease demand through energy efficiency, which is a very cost-effective strategy to achieve our goals of reducing overall energy consumption. All consumers will benefit from programs of this type because of reduced demand on finite resources and from efforts to reduce the carbon emissions that are driving global climatic changes."

The PSC action was taken Wednesday to resolve a timing problem inherent in Con Edison's pending natural gas rate case. Under the schedule for Con Edison's rate proceeding, the PSC will not consider the case until September, with new rates to go into effect Oct. 1. For a gas efficiency program to be effective for the upcoming winter heating season, the PSC said steps have to be implemented now and throughout the summer. Because of the timing, the PSC issued a notice in March seeking comment on a PSC staff proposal for a one-year bridging program. All parties commenting on the proposal, including Con Edison, endorsed the concept of early, separate authorization for a gas efficiency program so work could begin immediately.

The New York State Energy Research and Development Authority was selected to administer the one-year pilot program, and it was directed to outline the details of the gas efficiency program in a plan to be filed with PSC by June 1. The gas efficiency program will continue to allocate program benefits established by the current pilot program of 50% to low-income residential customers, 25% to other residential customers, and 25% to commercial and industrial customers.

Under the PSC order, Con Edison will be allowed to defer the program costs and document revenue losses attributable to the gas efficiency program. When the PSC considers Con Edison's full rate case in September, it then will determine how Con Edison may recover its costs.

The written order may be obtained from the PSC website at www.dps.state.ny.us by assessing the Commission Documents section and referencing Case 03-G-1671.

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