N.Y. PSC to Review ConEd LAUF, NYSEG Stranded Capacity Costs

The New York PSC instituted a proceeding to review Lost And Unaccounted For gas at Consolidated Edison, and also instituted a review of stranded natural gas capacity costs at New York State Electric and Gas.

As part of reconciling annual gas costs, ConEd discovered that it was including gas that did not belong in the Lost And Unaccounted For (LAUF) gas calculation. The PSC ordered ConEd to perform an analysis of the error and its impact on the company's customers. ConEd will also be required to provide a proposal for an appropriate remedy to correct the anomaly and its consequences.

ConEd has deferred a LAUF incentive of approximately $1 million in its revised filing while it evaluates the impact of the error on the LAUF incentive. The Commission directed ConEd to provide the results of its analysis and propose a remedy to the Commission within 60 days of the order.

A review of the reconciliation filing of NYSEG revealed that NYSEG's company-wide stranded capacity costs have generally been increasing on a monthly basis for the last several years, despite a 2007 Commission requirement of mandatory assignment of capacity by LDCs to retail marketers.

NYSEG has indicated to Staff that it may have made an ongoing error in its calculation of the charge to customers by not including capacity release credits in its surcharge.

Accordingly, the Commission established a proceeding to examine NYSEG's stranded capacity including an explanation for any increases in the amount of such capacity, how the associated costs have been calculated, and how NYSEG has mitigated such costs. NYSEG will be required to file a report within 60 days and explain the details regarding any errors and provide a proposed plan for remediating the situation.

The PSC's actions were taken in Case 10-G-0467, but is unclear if the new investigations will remain in that docket or be separately docketed.