The New York State Public Service Commission (PSC) announced Wednesday that FERC has approved a settlement between the PSC and Dominion Transmission Inc. (DTI) that will provide $11 million in annual savings to New York State’s natural gas utilities and customers.

The settlement, approved by the Federal Energy Regulatory Commission (Docket No. RP05-267-000), was jointly sponsored by DTI and the PSC, and calls for DTI to reduce its firm transportation reservation rates by more than 16% and its storage fuel retention rate by more than 17%.

The settlement is the result of the New York Department of Public Service staff’s analysis of financial and operating data filed by DTI at FERC in 2004. The settlement process was initiated in late 2004 when the PSC notified DTI of its intent to file an over-earnings complaint with FERC based on the analysis.

DTI and the PSC negotiated the settlement to avoid the possibility of costly and protracted litigation. The settlement also will provide customers with immediate rate relief and rate stability and provide DTI with revenue certainty. The approved rate reductions will produce total systemwide savings to DTI’s customers of about $49 million annually over a five-year period during which DTI must maintain the agreed-upon rates.

New York utilities and their customers that will primarily receive the annual savings include Central Hudson Gas & Electric, Consolidated Edison of New York Inc., Corning Natural Gas Co., KeySpan Energy Delivery Companies of New York and Long Island, National Fuel Gas Distribution Corp., New York State Electric and Gas Corp., Niagara Mohawk Power Corp., and Rochester Gas and Electric Corp.

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