When regulators grant changes to utility rates of return, they estimate growth on the basis of gross domestic product (GDP). But do utilities have any chance of growing at the same pace as GDP?...
Niagara Mohawk gets Rate Increase
Two New York Public Service Commission administrative law judges (ALJs) have recommended that Niagara Mohawk Power Corp. (NMP) be allowed to increase its 1995 electric and gas rates by $57 million (1.9 percent) and $10.7 million (1.7 percent), respectively (Docket Nos. 94-E-0098, 94-E-0099, and 94-G-0100). The proposal contrasts sharply with the PSC's 1994 recommendation to cut NMP rates by 7.1 percent over five years. NMP had asked for a 1.8-percent hike in electric rates, and a 4.2-percent increase in gas rates. Despite the ALJs' recommendation, however, NMP expects 1995 electric revenues to decrease by $28 million (0.9 percent).
The ALJs proposed that NMP's electric revenue adjustment mechanism be discontinued in 1995, although the fuel-adjustment clause would be retained. They also recommended a return on equity of 11 percent. The PSC is only considering NMP's 1995 rate request at this point; the utility's rate plan for 1996 to 1999 will be examined separately. (em LB
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