New York regulators on Feb. 20 adopted multiyear plans for Consolidated Edison Co. of New York Inc.'s electric, gas and steam delivery rates, a decision the company said will help better protect New Yorkers from the next major storm.

In a 5-0 vote, the state Public Service Commission approved, with minor modification, a joint proposal that sets a two-year electric rate plan, running through December 2015, and three-year gas and steam rate plans running through December 2016.

Each of the rate plans has a revenue requirement decrease in the first year and increases in the later years. The joint proposal, by levelizing those components, avoids increases to what customers pay for the duration of the rate plans, regulatory staff said during a presentation of the case.

According to SNL Energy affiliate Regulatory Research Associates, the plan allows for a $76.2 million electric revenue requirement reduction the first year and a $124 million increase in year two. For natural gas, there is a $54.6 million revenue requirement reduction in year one, and $38.6 million and $56.8 million increases in years two and three, respectively. The steam plan calls for a $22.4 million revenue requirement reduction in the first year, and respective $19.8 million and $20.3 million increases in the second and third years.

The plan sets a 9.2% return on equity for Con Edison's electric operations and a 9.3% ROE for gas and steam operations.

The commission said the way in which revenue collections are spread out will result in a $30.1 million credit to electric customers. That credit will be available at the end of the two-year rate plan and will be used to offset rates in the future.

If Con Edison does not file for new electric rates to take effect Jan. 1, 2016, electric delivery charges would increase 0.41% over current levels on a total bill basis and hold steady until the company files for and gets approval for new rates. The PSC said it would use the credit to reduce this potential increase to 0.15%.

A similar mechanism is in place for gas customers, with a $32.3 million credit used to offset a 2.16% increase in 2017. That credit would reduce the potential increase to 0.45%. On the steam delivery side, rates would increase 2.66% on a total bill basis in 2017, but with the help of an $8.2 million credit reduced to 1.43%. As with the electric delivery plan, the increases would kick in only if Con Edison does not file gas or steam delivery rate cases.

The joint proposal adopted by the commission also has environmental benefits, including a plan to replace leak-prone gas pipes and support for oil-to-gas conversions. Con Edison also will do a micro-grid pilot project and offer a voluntary time-of-use rate program, something particularly designed for electric vehicle owners, staff said.

The Consolidated Edison Inc. subsidiary filed its rate proposal months after Superstorm Sandy, a storm that hit the area with 90-mph wind gusts and a 14-foot storm surge. Sandy caused significant damage to Con Edison's equipment and multiple-day power outages to customers in New York City and Westchester County, N.Y.

"We're pleased the rate plan provides the resources needed to better protect New Yorkers from the next major storm," Con Edison said in a statement. "We will continue to work with the commission and all local and state leaders to make sure that investments are made in future years to provide our customers with the high reliability they expect and deserve."

Con Edison is planning to invest $1 billion over four years to harden and make its systems more resilient.

During the rate case review, a Storm Hardening and Resiliency Collaborative was created by stakeholders to develop resiliency measures and address how the storm hardening funds should be invested. With the commission order, the collaborative will continue through 2014.

'Model' for attempting to address climate change impacts

Con Edison also will study its vulnerability to climate change, something that will help determine how the utility can best prepare for rising sea levels, more intense storms and heat waves, environmental advocates that took part in the collaborative said. The Columbia Law School Center for Climate Change Law, Natural Resources Defense Council, Environmental Defense Fund and the Pace Energy and Climate Center said the decision will serve as a nationwide model.

"The Con Ed settlement serves as a model for how public utility commissions across the country should require the companies they regulate to ensure that essential services are still provided in the face of future climate change," Columbia Center for Climate Change Law Director Michael Gerrard said in a statement.

During the PSC meeting, commissioners said they were happy the more-than-year-long effort that led to the decision resulted in an agreement that took consumers and infrastructure needs into account.

PSC Chair Audrey Zibelman said the key elements of the plan recognize that critical issues, such as the impact of extreme weather conditions, need to be addressed.

"Our utility infrastructure absolutely needs to be looked at and thought through in terms of not what happened in the past, but what we're confronting in the future, what technology allows us to do and what we need to do to protect consumers," she said. (Case Nos. 13-E-0030, 13-G-0031, 13-M-0376, 13-M-0040, 09-E-0428)