Objection Filed Against Con Edison Request For Rate Increase

As I have mentioned here on a couple of occasions, I have joined with two colleagues to intervene in the regulatory proceeding where our local electric utility, Con Edison, has made its most recent request for a large rate increase. My colleagues in this enterprise are Roger Caiazza, who blogs as the Pragmatic Environmentalist of New York, and Richard Ellenbogen, a Cornell-trained engineer who as his day job runs a factory in Westchester County.

After a “deregulation” that took place in the 1990s, Con Edison almost entirely got out of the business of generating electricity, so this case is about the rates for delivery of the electricity, rather than generation. The basis for Con Edison’s request for a rate increase is substantially that it wants to build lots of new infrastructure, like additional cables, substations and transformers, to deliver incremental power to support widespread electrification of vehicles and buildings as part of New York State’s goal of “net zero” greenhouse gas emissions. That idea might make some sense if there were large amounts of zero-emissions electricity ready to be sent to New York City to be used for electrifying the buildings and vehicles. But in fact it is the opposite: a very large majority of the electricity that Con Edison delivers is generated by natural gas — which means that electrifying buildings and vehicles doesn’t reduce GHG emissions at all, and probably increases the emissions. New York State’s “climate” plans to generate lots of zero emissions electricity for New York City are almost completely dead. Its big program for off-shore wind generation in the waters off Long Island has been nixed by the federal government; and while the State continues to promote onshore wind and solar facilities in upstate New York, its plan to bring that power to New York City died, at least for now, in November 2024 when the new $11 billion Clean Path transmission line got canceled as uneconomic.

It’s actually great that these projects have died, because if they had gone forward they could have multiplied our electricity rates by at least double (before even getting started on huge costs of energy storage as penetration of intermittent renewables on the grid increased). Meanwhile, the death of the generation and transmission projects has made the whole idea of building and vehicle electrification useless, and indeed counterproductive (in terms of reducing GHG emissions, if you should happen to care about that). It doesn’t take an engineering genius to understand that burning natural gas on-site to heat a building uses less natural gas than burning it at a power plant, generating electricity, transmitting the electricity to a house, and then using the electricity at the house to make heat. But Con Edison — egged on by advocates ranging from environmental crazies to the religiously-committed New York City itself — soldiers on to try to build expensive new infrastructure to receive mythical zero-emissions electricity that does not exist and is in fact nothing but regular-old natural gas electricity.

The concept of Messrs. Caiazza, Ellenbogen and myself has been to see if we can inject some rationality into the process to prevent entirely futile and wasteful (and even counterproductive) spending in pursuit of the infeasible “net zero” goals. None of the three of us are being compensated in any way for this work. Basically, we are doing it as a hobby, to see if we can save New Yorkers from their own folly.

On Wednesday (November 26) we filed a document setting forth our position, titled “Statement of Independent Intervenors Roger Caiazza, Richard Ellenbogen, and Francis Menton In Opposition to the Joint Proposal.” To view our Statement, go to this link to the docket of the proceeding before the New York Public Service Commission, and click on Document Number 214.

Some procedural history on where we are: Con Edison started this rate proceeding back in January 2025, by requesting rate increases of about 10% each year for the years 2026, 2027 and 2028. Anybody with an interest in the matter (like a ratepayer) was allowed to intervene, and shortly there were about 100 parties, three of them being Messrs. Caiazza, Ellenbogen and myself. Other parties range from New York City, Westchester County, Amtrak, the MTA, and various advocacy and environmental groups, to state legislators and individual ratepayers.

In June the State Department of Public Service paused the proceedings to begin settlement negotiations. My colleagues and I opted to join those, but as the price of joining we were sworn to confidentiality as to the discussions. And thus I have had nothing to report for about five months. However, the settlement negotiations ended at the beginning of November when all the big players entered into what they call their “Joint Proposal.,” often abbreviated “JP.” The JP got filed on November 5, and is Item 183 on the Public Service Commission docket. The JP itself is some 300+ pages long, and I would not recommend trying to read it; however, a Summary of the Joint Proposal, 6 pages long, was filed the next day on November 6. It is item 185 on the docket.

The good news about the JP, I suppose, is that Con Edison has been induced to reduce its request for a rate increase from about 10% per year to about 3% per year. (My own inference from watching the process is that Con Edison always knew that 3% was the most it could get, and only put up the 10% number at the beginning to have something to back off from.). The bad news is that there is still lots of spending in the Proposal to support “climate” things like building and vehicle electrification, and worse, they refuse to break out which of the spending is for these “climate” purposes versus the main job of assuring safe and reliable electricity.

So with that background, here are some choice excerpts from our submission. From the introductory section:

The Independent Intervenors object to the JP because it seeks to implement large rate increases for projects not necessary for or germane to reliability and safety of the electrical system and that are instead intended to support extraneous goals that are impossible and infeasible. The bases for the objections of the Independent Intervenors include:

• The JP supports spending for purposes of building electrification and vehicle electrification, but there is not enough zero-emissions electricity generation capacity available to the downstate region to accomplish those goals reliably, and therefore any spending on Company delivery infrastructure for these purposes is wasteful. The Independent Intervenors object to spending ratepayer money supposedly for the delivery of electricity, when the electricity does not in fact exist.

• Spending by the Company to support building and vehicle electrification is actually counterproductive for Climate Leadership & Community Protection Act (CLCPA) goals because there is and will be little zero-emission generation available to the Company service territory during and after the JP period. Therefore, building and vehicle electrification will increase rather than decrease GHG emissions.

And from the concluding sections:

THE JP IS UNJUST, UNREASONABLE, AND CONTRARY TO THE PUBLIC INTEREST

There is nothing “just” or “reasonable” in:

• Imposing on the ratepayers billions of dollars of costs for purposes having nothing to do with system reliability or safety, and instead supporting goals that are infeasible (as admitted by the State itself) and impossible to achieve such that the public’s funds will be completely wasted.

• Imposing huge costs on ratepayers to build new infrastructure for the delivery of new zero-emissions electricity that in fact does not exist and will not exist in this state during the time period of this rate case and for many years thereafter.

• Hiding and concealing potentially billions of dollars of costs in a rate increase that have nothing to do with system reliability and safety and instead are going for infeasible and impossible goals.

• Providing potentially billions of dollars of ratepayer funds to support electrification projects supposedly to reduce GHG emissions, but that will instead increase GHG emissions because of the characteristics of the system that cannot be changed in any relevant time frame.

In the intervening sections between the introduction and conclusion, should you be interested, there is lots of detail about such things as failure to get zero-emission generators or transmission lines constructed, and actual emissions data from the downstate electricity system showing that you actually increase emissions by banning natural gas heat.

I do not know if the objections of myself and my colleagues will get much if any traction in this proceeding. And even if we do get some traction, this proceeding is somewhat peripheral to the central goals of New York’s “climate leadership” initiative of generating lots of zero-emissions electricity (and, supposedly, showing the world how that can be done). Still, we may get at least some of the vast collection of New York energy bureaucrats to look critically at one corner of this ridiculous situation. Maybe.