PLANS OK'D for electric IOUs under New York's Competitive Opportunities docket.

CENTRAL HUDSON GAS & ELECTRIC CORP. RETAIL CHOICE: Offered to 8 percent of total load in 1998; additional 8 percent each year; choice for all by July 1, 2001. SAVINGS: $10.5 million to fund 5-percent rate cut for large industrials; all other rates frozen (since 1993) through June 30, 2001. Earmarks $24.5 million for incentives for residential, commercial and small industrial classes. Generation backout rate is highest among IOU restructuring plans. DIVESTITURE: Must auction fossil generation by June 30, 2001. Company receives 5 percent of gross proceeds up to net book value, even if sale at a loss, plus 10 percent of gross proceeds above net book value, subject to $17.5 million cap. RETURN ON EQUITY: All earnings above 10.6 percent return on equity go to customers. OTHER: $3.5 million for system benefits (efficiency, environmental protection) for first 3 years of plan. See, Case 96-E-0909, Feb. 19, 1998 (N.Y.P.S.C.).

CONSOLIDATED EDISON OF NEW YORK, INC. RETAIL CHOICE: Begins June 1, 1998, for 500 MW of load; up to 1,000 MW by April 1, 1999; additional 1,000 MW by April 1, 2000; full implementation by Dec. 31, 2001, or when state achieves full operation of independent system operator, whichever comes first. SAVINGS: Immediate 25-percent rate cut for large industrial customers with monthly demand above 1,500 kW; 10-percent for commercial and general service customers (+1,500 kW) over 5 years; 10-percent for residential and small business by end of fifth year. Prior rate increases waived. Total savings between $1 billion and $1.5 billion over 5 years. DIVESTITURE: Company to sell at least 50 percent of in-city generating capacity; process was to begin by mid-April for 30 percent within 90 days. (Sell-off plan OK'd, Jan. 14, 1998, Case 96-E-0897, 183 PUR4th 159.) RETURN ON EQUITY: Approves 10.9 percent, with sharing of excess earnings triggered at 12.9 percent. OTHER: Plan expands company's Business Incentive Rate, making 65 MW available at reduced rates to encourage businesses to locate in ConEd's service territory. See, Case 96-E-0897, Opinion No. 97-16, Nov. 3, 1997 (N.Y.P.S.C.).

NEW YORK STATE ELECTRIC & GAS CORP. RETAIL CHOICE: Begins Aug. 1, 1999 for all customers. SAVINGS: Large industrials get 5-percent annual rate cuts over 5 years. Rates frozen for residential and small commercial classes for 4 years, with 5-percent cut in fifth year. Overall customer savings put at $725 million ($522 million from foregone rate increases). Generation backout credit equals 3.23 cents per kWh through July 31, 2000; 3.47 cents until July 31, 2001; then 3.71 cents through end of settlement. DIVESTITURE: Company must sell its coal-fired generating plants by multi-round auction process by Aug. 1, 1999. Proceeds above book value will mitigate nuclear stranded costs; company may retain 20 percent of gain from renegotiation and/or termination of above-market purchased power contracts. RETURN ON EQUITY: Earnings above 9 percent return on equity trigger sharing with ratepayers. Cap imposed at 12 percent (all excess earnings go to customers). OTHER: Includes about $40 million in funding for system benefits charge for energy efficiency and public policy programs. See, Case 96-E-0891, Opinion No. 98-6, March 5, 1998 (N.Y.P.S.C.).

NIAGARA MOHAWK POWER CORP. RETAIL CHOICE: Begins in 1998 for large industrial and commercial customers; available for all by Jan. 1, 2000. SAVINGS: Immediate 25-percent cut for the very largest industrial and commercial customers. By 2000, all industrials to save about 13 percent, versus 3.2 percent for residential and small commercial classes (many of whom may see no decrease, and perhaps an increase). PSC defers final decision on proposed customer charges for residential and small commercial classes that would produce net rate increase in some cases. Order admits that generation backout rate is "low" (reflects fuel costs and wholesale prices in New York Power Pool) but rejects Enron proposal for higher rate of 3.95 cents per kWh, reflecting property taxes and higher NYPP reserve margin (18 percent, up from 14 percent). DIVESTITURE: Company may retain 15 percent of any gain above net book value as incentive for sale of non-nuclear generation. Nuclear generation would remain with the regulated T&D company. RETURN ON EQUITY: Company assumes $2 billion in stranded costs by accepting "very low" equity return over 5 years. OTHER: Approves "floating" competitive transition charge to fund $3.6-billion debt needed to execute settlement with 16 independent power producers to restructure uneconomic purchased power contracts. Exit fees and backup service charges for on-site generators designed to make CTC nonbypassable. Provides third-party administrator for system benefits charge. Set up $10 million fund for employee retraining/outplacement/severance. See, Case 94-E-0098, Opinion No. 98-8, March 20, 1998 (N.Y.P.S.C.).

ORANGE & ROCKLAND UTILITIES INC. RETAIL CHOICE: Begins May 1, 1998; offered to all by May 1, 1999. Company to file plan to make billing/metering services competitive by May/December 1999. SAVINGS: Large industrials can realize average price of 6 cents/kWh (assumes 8.5 percent cut). For "all other customers," rates cut 1.09 percent in first year, 1 percent in second, following other recent cuts. $32.4 million in total customer rate cuts over 4 years ($21.6 million for residential and small business). DIVESTITURE: Assumes transfer of generation by May 1, 1999. Gains accrue first to "all-other" group (see above), up to equivalent of 5 percent rate cut. Portion of uneconomic costs recovered through CTC, with CTC cut back if divestiture is delayed and expiring if no transfer by Oct. 31, 2000. No CTC if assets sold prior to May 1, 1999. RETURN ON EQUITY: Predicated on 10.4 percent. Ratepayers get 75 percent of excess earnings above 11.4 percent. OTHER: System benefits charge of about one mill per kWh ($3.2 million per year) funds demand-side management and other public policy initiatives. Offers $7.5 million for employee severance/retraining/outplacement. See, Case 96-E-0900, Opinion No. 97-20, Dec. 31, 1997, 182 PUR4th 201 (N.Y.P.S.C.).

ROCHESTER GAS & ELECTRIC CORP. RETAIL CHOICE: Available to new customers and 10 percent of energy load for existing customers (all classes) by July 1, 1998; 20 percent by July 1, 1999; 30 percent by July 1, 2000; in full by July 1, 2001. SAVINGS: 10 percent rate cut for large industrials (to achieve average rate of 5.6 cents per kWh); 8 percent for small commercial (average rate 6.8 cents per kWh); 7.5 percent for residential and small commercial by final year of term; cumulative reduction of $64.6 million by July 1, 2001. Backout rate is 2.3 cents per kWh during energy-only stage (includes 1.9 cents plus retailing charge), to rise to 3.2 cents per kWh by July 1, 1999, equal to combined fixed and variable strandable non-nuclear generation costs, plus retailing costs (contingent on development of statewide market for energy and capacity). DIVESTITURE: Required for fossil and hydro generation. Shareholders keep 20 percent of any net gain on sale, but 40 percent of first $20 million if divestiture occurs quickly. Nuclear investments (Ginna, Nine Mile II) would remain in regulated T&D company. RETURN ON EQUITY: Ratepayers receive 50 percent of excess earnings above 11.5 percent. OTHER: System benefit charge allowed for research and development, energy efficiency, low-income and environmental programs. Company must file market power mitigation plan with FERC. See, Case 96-E- 0898, Opinion No. 98-1, Jan. 14, 1998 (N.Y.P.S.C.).

(em Bruce W. Radford, editor

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