Regulatory Matters

Rate Plans

Rockland Electric Company (RECO)

In February 2017, the New Jersey Board of Public Utilities (NJBPU) approved a stipulation of settlement for a RECO electric rate plan commencing March 2017. The following table contains a summary of the electric rate plan.



RECO
Effective period		March 2017 (a)
Base rate changes		Yr. 1. - $1.7 million
Amortization to income of net regulatory (assets) and liabilities		$0.2 million over three years and continuation of $(25.6) million of deferred storm costs over four years expiring July 31, 2018 (b)
Recoverable energy costs		Current rate recovery of purchased power costs.
Cost reconciliations		None
Average rate base		Yr. 1 - $178.7 million
Weighted average cost of capital (after-tax)		7.47 percent
Authorized return on common equity		9.6 percent
Cost of long-term debt		5.37 percent
Common equity ratio		49.7 percent


(a)	Effective until a new NJBPU-approved rate plan goes into effect.


(b)	In January 2016, the NJBPU approved RECO’s plan for a 3-year, $15.7 million electric system storm hardening capital program, the costs of which RECO, beginning in 2017, is collecting through a customer surcharge.

In January 2017, RECO filed a request with FERC for an increase to its annual transmission revenue requirement from $11.8 million to $19.7 million. The filing reflects a return on common equity of 10.7 percent and a common equity ratio of 48 percent.

Regulatory Assets and Liabilities

Regulatory assets and liabilities at March 31, 2017 and December 31, 2016 were comprised of the following items:



	Con Edison		CECONY
(Millions of Dollars)	2017	2016	2017	2016
Regulatory assets
Unrecognized pension and other postretirement costs	$2,911	$2,874	$2,748	$2,730
Future income tax	2,434	2,439	2,321	2,325
Environmental remediation costs	808	823	697	711
Revenue taxes	307	295	291	280
Deferred derivative losses	68	48	62	42
Deferred storm costs	53	56	3	3
Municipal infrastructure support cost	49	44	49	44
Indian Point Energy Center	48	50	48	50
Pension and other postretirement benefits deferrals	48	38	19	7
Surcharge for New York State assessment	45	28	42	26
Unamortized loss on reacquired debt	42	43	40	41
O&R property tax reconciliation	35	37	—	—
Recoverable energy costs	29	42	26	38
Brooklyn Queens demand management program	28	29	28	29
Preferred stock redemption	25	25	25	25
Net electric deferrals	20	24	20	24
Workers’ compensation	14	13	14	13
O&R transition bond charges	13	15	—	—
Other	97	101	87	85
Regulatory assets – noncurrent	7,074	7,024	6,520	6,473
Deferred derivative losses	91	91	85	86
Recoverable energy costs	4	9	—	4
Regulatory assets – current	95	100	85	90
Total Regulatory Assets	$7,169	$7,124	$6,605	$6,563
Regulatory liabilities
Allowance for cost of removal less salvage	$772	$755	$649	$641
Pension and other postretirement benefit deferrals	197	193	167	162
Property tax reconciliation	162	178	162	178
Net unbilled revenue deferrals	104	145	104	145
Unrecognized other postretirement costs	91	60	91	60
Settlement of prudence proceeding	87	95	87	95
Carrying charges on repair allowance and bonus depreciation	62	68	61	67
New York State income tax rate change	56	61	55	60
Variable-rate tax-exempt debt – cost rate reconciliation	50	55	44	48
Base rate change deferrals	36	40	36	40
Settlement of gas proceedings	27	27	27	27
Earnings sharing - electric, gas and steam	20	39	10	28
Net utility plant reconciliations	15	16	13	15
Other	175	173	148	146
Regulatory liabilities – noncurrent	1,854	1,905	1,654	1,712
Refundable energy costs	60	29	36	5
Revenue decoupling mechanism	41	71	38	61
Deferred derivative gains	28	28	22	24
Regulatory liabilities – current	129	128	96	90
Total Regulatory Liabilities	$1,983	$2,033	$1,750	$1,802