The Commission approved the Company’s current rate plans in its Order Adopting Terms of Joint Proposal and Establishing Electric and Gas Rate Plans issued March 15, 2018 in Cases 17-E-0238 and 17-G-0239, and in its Order Adopting Terms of Joint Proposal, Establishing Rate Plans and Reporting Requirements issued January 20, 2022 in Cases 20-E-0380 and 20-G-0381 (collectively Rate Orders). The Rate Orders allow the Company to defer the financial impact of new legislation, rules or orders. The Company recently deferred for ratemaking purposes certain types of fees under this provision. However, due to certain timing differences, these regulatory accounting deferrals cannot be reflected in its financial statements under GAAP.

The Company has deferred, for regulatory purposes, unbilled late payment and related fees for the period March 2020 through December 2021. These fees, $8.8 million for electric service and $2.3 million for gas service, are part of the unanticipated financial impact that resulted from the State’s necessary orders, issued to address the COVID-19 pandemic.

Under GAAP, the Company may only record the deferral on its income statement if the Company 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 deferral by the end of 2022. The Company proposes to establish a surcharge/surcredit recovery mechanism that permits full recovery/refund of any applicable deferred fees within GAAP’s recording timeframe.

For the Rate Year 3 (April 1, 2020 through March 31, 2021) and the Bridge Period (April 1, 2021 through June 30, 2021) fee deferral, the Companies proposes to begin recovery in July 2022 and end in June 2023. For the second year (July 1, 2021 through June 30, 2022) of fee deferral, the Company proposes to begin recovery (as a surcharge) or return to customers (as a surcredit) in July 2023 and end in June 2024. For the third year (July 1, 2022 through June 30, 2023) fee deferral, the Company proposes to begin recovery or return to customers in July 2024 and end in June 2025. The Company states that they are open to alternative recovery/return periods that are within the GAAP requirements.

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.

(20-E-0380SP2)