The New York Public Service Commission voted last Thursday to direct the state’s regulated natural gas utilities to file special cost-based rates for gas delivery to residential customers that have their own on-site “distributed” power generation. The new rates are expected to be lower than those currently in place.

The new rates, which are scheduled to take effect Oct. 15, also would be simpler for prospective distributed generation customers to understand and “more appropriately tailored to residential [distributed generation] usage,” the PSC said in a statement on the ruling.

“These new rates should provide more opportunities for residential customers to consider small efficient electric generation units to help meet their family electricity needs and help control their energy costs,” said Chairman William Flynn.

Flynn also noted that distributed generation, such as fuel cells and micro turbines, can help reduce power demand and improve reliability.

Because they are relatively new, existing delivery service rates for residential distributed generation units do not reflect the specific system cost and usage characteristics of distributed generation customers, the PSC said. Delivery service under the current rates result in higher costs for customers.

Utilities were required to file similar rates last year for non residential customers who use distributed generation. The new residential service rates must be filed in 90 days and the initial rates must be established for three years.

The commission also approved the collection and analysis by the utilities of a variety of data related to the use of natural gas by distributed generation customers. The collected information will be used to set rates in future years.

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