NYSEG Notes Consequences from Delay on Metering Error Petition

New York State Electric & Gas Corporation informed FERC of several considerations in favor of action on a petition relating to NYSEG and Niagara Mohawk metering errors which prompted a partial settlement which has been sitting at the Commission for about a year, in Docket EL09-26. NYSEG stopped short of requesting immediate action on the settlement.

As first reported in Matters in December 2008, the case concerns NiMo and NYSEG metering errors dating back to 1999 which resulted in an overstatement in NYSEG's subzone Unaccounted for Energy (UFE) and an understatement in NiMo's subzone UFE, resulting in loads in NYSEG's territory overpaying by about $20 million (Only in Matters, 12/31/08). A settlement among several parties would prescribe the methodology for any potential rebilling of the affected subzones, leaving to litigation the question of whether rebilling should occur (Matters, 10/7/09).

FERC Staff has supported NYSEG's request for rebilling, but the request is opposed by NiMo, the New York ISO, and competitive retail suppliers (Only in Matters, 12/17/09). The Retail Energy Supply Association and ConEdison Solutions have opposed rebilling, citing the harm rebilling for a 10-year period would impose on competitive suppliers, who do not have captive customers and guaranteed cost recovery for prudent expenses.

Competitive retail suppliers would be responsible for 16% of the amounts owed.

While recognizing that the issue presented in the proceeding is challenging, NYSEG noted that the ongoing uncertainty about the final resolution of the petition raises accounting questions for NYSEG. In addition, NYSEG said that there are questions concerning interest, should the Commission direct that the invoices be corrected with interest.