The Commission approved the Companies’ current rate plans in its Order Approving Electric and Gas Rate Plans in Accord with Joint Proposal, with Modifications, issued November 19, 2020, in Cases 19-E-0378, et. al. (Rate Order). The Rate Order allows the Companies to defer the unanticipated financial impact of a legislative, accounting, tax, fee, or government-mandated action occurring during the term of the Joint Proposal. The Companies recently deferred unbilled late payment and related fees under this provision for ratemaking purposes, for the period May 1, 2020 through April 30, 2021 (Rate Year 1). These fees, $4.474 million for NYSEG Electric; $1.277 million for NYSEG Gas; $2.293 million for RG&E Electric and $2.422 million for RG&E Gas, are part of the unanticipated financial impact that resulted from the State’s necessary orders, issued to address the COVID-19 Pandemic. The Companies’ propose to offer a shareholder contribution of $1.6 million, either to help address arrearages owed to the Companies or to support energy efficiency or other clean energy initiatives, with a focus on disadvantaged communities.

Under GAAP, the Companies may only record the deferral on its income statements if the Companies will be recovering it within 24 months from the end of the annual period in which it was recognized. In order to record the deferral on its financial statements, the Company must recover the Rate Year 1 deferral by May 2023. The Companies propose to establish surcharge/surcredit recovery mechanisms that permit full recovery/refund of any applicable deferred unbilled fees/late payment charge deferrals within GAAP’s recording timeframe.

The Companies propose to begin a ten-month recovery of the Rate Year 1 deferral as a surcharge, beginning in July 2022. The Companies state they would agree to an 18-month recovery/passback of any Rate Year 2 (May 1, 2021 – April 30, 2022) deferred amounts, which could begin in November 2022.

Additionally, the Companies identified the need to address the allowance for recognition of certain deferrals under IFRS. Such recognition is currently in place for a number of regulatory deferrals in its Rate Order, and accordingly, the Companies propose that “Unbilled Fees/Late Payment Charge deferrals” and “Major Storm deferrals,” due to the continued multitude of major storms in the Companies’ service territory during the term of the Joint Proposal, be included in the list of regulatory deferrals recognized under IFRS to eliminate a recognition and/or recovery timing issue among Commission ratemaking accounting and practices and the GAAP and IFRS accounting/financial reporting standards.

The full text of the petition and the full record of the proceeding may be reviewed online at the Department of Public Service web page: www.dps.ny.gov. The Commission may adopt, reject or modify, in whole or in part, the action proposed and may resolve related matters.

Statements and analyses are not submitted with this notice because the proposed rule is within the definition contained in section 102(2)(a)(ii) of the State Administrative Procedure Act.

(22-M-0119SP1)