Dive Brief:

• Consolidated Edison and a broad range of parties have reached a settlement on a $200 million, three-year rate increase that includes expanded efficiency spending, grid modernization and the installation of smart meters, potentially setting a new precedent of funding efficiency programs through utility rate cases in New York. 
• The settlement includes $99 million in energy efficiency spending from 2017-2019, which advocates say could yield more than 300 GWh of savings annually.
• Parties to the settlement include staff of the New York Public Service Commission, Natural Resources Defense Council (NRDC), the City of New York, and New York the Power Authority. 

Dive Insight:

If regulators approve the compromise, then it will set a new precedent for funding energy efficiency programs through utility rate cases in New York, something that heretofore has yet to be done. 

ConEd's settlement, filed Monday, details three years of increased electric revenues, beginning with $195 million in the first year, and then falling to about $155 million in the second and third. The first year revenues are in addition to an approximately $48 million increase in electric delivery service revenues established last year.

The settlement parties, about two dozen in total, agreed to implement the new rates, plus interest, on a levelized basis amounting to $199 million annually, beginning next year. 

The utility issued a statement saying the proposal "will fund critical infrastructure investments in our gas and electric delivery systems to enhance safety and maintain reliability," as well as supporting installation of advanced metering, new efficiency programs and technology to empower customers.

The rate increase would be Con Edison's first for electric delivery rates in nearly five years. NRDC participated in discussions for the new efficiency programs, but does not take a stance on the proposal overall. 

NRDC said the deal represents "​a significant commitment by the utility to implement new energy efficiency programs, as well as performance incentives that reward Con Edison’s shareholders for taking actions to save electricity."

Two factors make the deal significant, NRDC said. The settlement includes a commitment to develop innovative performance incentives that will reward Con Edison’s shareholders for energy savings regardless of their source. "The new incentives will motivate Con Edison to engage in all actions that save electricity, regardless of whether those savings are explicitly attributable to any particular Con Edison program," the group said.

According to NRDC, the joint agreement represents the first time a utility will engage in significant energy efficiency efforts beyond an Energy Efficiency Transition Implementation Plan, through a rate case.

"That is welcome news, because all utility ETIP programs approved by the Commission (including Con Edison’s) were far too small," NRDC said. Under the joint proposal, by 2019 Con Edison is expected to achieve energy savings of roughly 0.7% percent of its total load, which the group said is more than than twice what was expected through ETIP spending alone.