The New York utility, Central Hudson Gas and Electric, filed a rate plan with the state Public Service Commission (PSC) at the end of July which will see a service increase for customers starting in 2015 in order to modernize and strengthen its utility delivery systems.
In a press release issued July 25, Central Hudson states the strengthening of its systems will come with "modest impacts to monthly household electric and natural gas utility bills."
The plan, if approved by the PSC, would go into effect following the current two-year rate hike freeze which began in June of 2013 and ends June 20, 2015.
The rate plan, if approved as proposed, will raise total average residential electricity bills by about $4.78 per month, or a 4.4 percent increase based on an average of 620 kilowatt-hours (kwh) of electric usage per month and July 2014 market supply costs for electricity.
Household bills for gas delivery systems will increase by about $1 a month.
"Severe weather is occurring more frequently, and here in the Mid-Hudson Valley the four most severe storms to impact the region's electric system have occurred during the last five years," Central Hudson's press release states. "The plan proposes several storm-hardening measures and higher standards when replacing aging infrastructure in storm-prone areas, all to improve system resiliency and service reliability when extreme weather strikes."
Central Hudson is also calling for the rate hike in order to "embrace new technologies" to improve grid efficiency, as well as the development of community solar panel projects.
The company also hopes to replace aging infrastructure, "some of which was installed in the 1920s."
"Utilities, like all businesses, include the cost of investments they make in their facilities in their products or services they sell. Just as we all pay for increased costs for goods made or delivered by businesses, Central Hudson's proposed plan includes costs above and beyond what is budgeted in current rates," said Central Hudson Director of Media Relations John Maserjian. "While Central Hudson certainly reinvests revenues it earns in the electric and natural gas systems, we are forecasting higher levels of investments in the future."
He goes on to say that more than half of the rate increase is related to necessary investments in the electric and gas system, many of which are encouraged by state regulators to improve system reliability, replace aging infrastructure and enhance efficiency.
"We believe the proposed investments in the delivery system are needed and necessary," he said.
The plan is currently under review at the PSC.
"The review of a rate case takes approximately 11 months," said PSC Director of Public Affairs Jim Denn. "Our detailed and thorough review process will provide ample opportunity for public participation and comment with a goal to ensure safe and reliable electric service at just and reasonable rates."
Concurrent with the review process, Central Hudson has created a website, www.valueforourvalley.com, to provide further information about its proposal. The site includes several videos which aim to answer ratepayers' frequently asked questions.
If and when the new rates take effect, Central Hudson’s delivery rates will have been unchanged for three years prior to this new rate hike.