New York State Electric & Gas Corp. (NYSEG) and Rochester Gas and Electric Corp. (RG&E) Tuesday were denied rate hikes by the New York State Public Service Commission (PSC) on the recommendation of commission staff.
Earlier this year the companies said they faced “a significant shortfall in cash needed to make required infrastructure investments,” but Sen. Charles Schumer (D-NY) appealed to the PSC to deny the increase, which he said “reeks of profit mongering.” NYSEG and RG&E had been prohibited from filing for rate relief under the terms of their recent acquisition by Iberdrola SA (see Daily GPI, Dec. 10, 2007) unless they could demonstrate that their ability to provide safe and reliable service would be jeopardized (see Daily GPI, Feb. 17).
“The commission has determined the evidence in this proceeding does not indicate that NYSEG’s and RG&E’s ability to provide safe and reliable service to their customers is jeopardized,” said commission Chairman Garry Brown on Tuesday. “This determination is made in consideration of the fact that the companies agreed, as part of the Iberdrola merger agreement, to not file for a rate increase within a certain time period unless they could show financial performance would fall to levels that would jeopardize the ability to provide safe and reliable service.”
The commission noted that in approving the acquisition of Energy East, the parent company of NYSEG and RG&E, by Iberdrola in September the companies agreed to the condition that NYSEG and RG&E would not file for rate relief before September 2009. In petitions filed on Jan. 27 NYSEG and RG&E asserted that the situation in the global financial markets has had serious negative financial consequences for them, thereby necessitating the filings to increase electric and gas delivery rates by a total of $278 million starting July 1.
“The commission today concluded that NYSEG’s and RG&E’s financial health depends on reasonable financial management by the companies and their corporation parents, not on emergency rate relief,” Brown said.
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