New York Utilities File Errata To Previously Filed Average 12-Month Supply Rates (Used For ESCO Rate Cap); Corrected Rates Are Significantly Lower

The Brooklyn Union Gas Company, d/b/a National Grid NY (KEDNY), and KeySpan Gas East Corporation d/b/a National Grid (KEDLI), each filed with the New York PSC an errata to each LDC's December 31, 2019 twelve-month trailing average supply rates, which were originally filed on January 29, 2020 (for the 12 months ending December 31, 2019).

Each LDC said that it has identified an issue that affected the calculation of rates in the original filing, and each filed an errata with corrected twelve-month trailing average supply rates or the 12 months ending December 31, 2019. The corrected 12-month average supply rates are significantly lower than the originally filed 12-month average supply rates

As previously reported by EnergyChoiceMatters.com, in the New York PSC's retail market reset order, one of the compliant products ESCOs may continue to offer mass market customers is a fixed rate commodity product that is priced at no more than 5% greater than the trailing 12-month average utility supply rate

While the specific December 31, 2019 average rates from the KeySpan LDCs were not relied upon by ESCOs due to extended compliance deadlines for ESCOs (which rendered the December 31, 2019 rates moot, and as the average rates have superseded by quarterly updates since that time), the errata filings do illustrate the perils associated with the mechanism adopted by the PSC, as errata are not uncommon in regulatory filings.

Moreover, it begs the question of how ESCOs will be treated when they rely upon a utility's original filing of the 12-month average rate when setting their fixed rates and entering into then-compliant contracts with customers, only for such utility average rates to be revised via an errata filing, perhaps months later -- particularly when the rate under the errata is lower than the original rate, and which may cause the ESCO's contracted rate with the customer, which had been based on the utility's original filing, to now exceed the 5% threshold which the PSC has established as a rate cap.

The original and errata 12-month average supply rates are below for comparison:

Brooklyn Union Gas Company (KEDNY) d/b/a National Grid
-- Mass Market 12 Month Trailing Weighted Average Prices Ending December 31, 2019

ORIGINAL RATES
KEDNY                             Weighted Total
                                    Supply Rates
                                     ($/Therm) 
Weighted Total
Supply Rates
($/Therm) *
SC 1 - Residential Service              $0.5983
SC 2 - General Service Non Residential  $0.6066
SC 3 - Multi-Family Buildings           $0.5985


CORRECTED RATES
KEDNY                             Weighted Total
                                    Supply Rates
                                     ($/Therm) 
Weighted Total
Supply Rates
($/Therm) *
SC 1 - Residential Service              $0.4779
SC 2 - General Service Non Residential  $0.4850
SC 3 - Multi-Family Buildings           $0.4780

KeySpan Gas East Corp. (KEDLI) d/b/a National Grid
--Mass Market 12 Month Trailing Weighted Average Prices Ending December 31, 2019

ORIGINAL RATES
KEDLI                         Weighted Total
                               Supply Rates
                                ($/Therm) 
SC 1 - Residential Service        $0.5530
SC 2 - Non Residential Service    $0.5599
SC 3 - Multiple-Dwelling Service  $0.5557


CORRECTED RATES
KEDLI                         Weighted Total
                               Supply Rates
                                ($/Therm) 
SC 1 - Residential Service        $0.4512
SC 2 - Non Residential Service    $0.4572
SC 3 - Multiple-Dwelling Service  $0.4535