New York DPS Staff Oppose ConEd Proposal For Ratepayer Funded Innovation Initiative
May 28, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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Staff of the New York Department of Public Service have opposed, in rate case testimony, Consolidated Edison's proposed Innovation Initiative
In its rate case, ConEd proposes to establish a corporate-wide Innovation Initiative that would develop and scale new ideas and technologies. As proposed, the Innovation Initiative consists of a team of company employees and the Innovation Hub, which would guide project development and governance. ConEd also proposes to establish an Innovation Common Fund, funded through customer rates, as a mechanism for funding such projects
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ConEd has described the Innovation Initiative as providing a third pathway for developing innovative projects and products, in addition to Con Edison’s Research and Development (R&D) Program and Demonstration Projects.
In reply to a Staff discovery request, ConEd said that it does not plan to perform a benefit cost analyses (BCA) related to its Innovation Initiative projects. Rather, the company proposes that each project must demonstrate benefits and must meet one or more metrics related to public and employee safety, customer experience, and cost efficiency. These projects would be reviewed, approved, and evaluated roughly every three months, by two of the company’s Senior Vice Presidents.
ConEd said that projects to be developed under the Innovation Initiative range from new online platforms and data analytics programs to improved remote methane detectors and machines capable of performing and expediting electrical work in manholes that would otherwise be done by company employees.
In testimony, a panel of Staff witnesses said that, "Although we do not object to the Company’s continued efforts to research and find new and innovative projects, we do not support the Company’s proposal to implement a general budget and fund for projects to be determined solely by Company employees. Our objection lies not in the projects themselves, but in the proposed funding and project approval process."
"If the Company chooses to pursue these projects in the future, it should follow established processes for requesting authorization for additional funding by filing a petition justifying the project and requested cost recovery. Any such petition should include a BCA or other cost-justification analysis," a panel of Staff witnesses said
Staff recommended eliminating the company’s proposed budget and full-time employee requests related to the Innovation Initiative during the Rate Year. In addition, Staff recommended adjustments to remove ratepayer contributions toward the Innovation Initiative from the historic test year and 2019 period.