July 30, RE: Case 17-G-0794, Reconciliation of Purchase of Receivables

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1 Consolidated Edison Company of New York, Inc. 4 Irving Place New York NY July 30, 2018 Honorable Kathleen H. Burgess Secretary New York State Public Service Commission Three Empire State Plaza, 19 th Floor Albany, New York Dear Secretary Burgess: RE: Case 17-G-0794, Reconciliation of Purchase of Receivables Consolidated Edison Company of New York, Inc. ( Con Edison or the Company ) is filing with the Public Service Commission (the Commission ) amendments to its Schedule for Electricity Service, P.S.C. No. 10 Electricity (the Electric Tariff ), applicable to its customers in the City of New York and the County of Westchester. The revised Electric Tariff Leaves, which are identified below, are filed to become effective on January 1, 2019: Leaf No. Revision No. Superseding No Reason for Filing This filing is made pursuant to the Commission s Order Modifying Reconciliation of Gas Purchase of Receivables, issued and effective July 13, 2018, in Case 17-G-0794 (the Order ). In the Order, the Commission concluded that since energy service companies ( ESCOs ) are paying costs related to credit and collection and theft ( C&C ) through the Purchase of Receivables ( POR ) Discount Percentage, the reconciliation of target C&C dollars and C&C recoveries should be credited or surcharged to ESCOs, and not to customers, as currently reconciled for Con Edison s electric and gas services. Accordingly, the Order required the Company to: (1) file gas tariff revisions on or before September 30, 2018 to become effective on January 1, 2019, and (2) file separate electric tariff revisions on or before July 30, 2018 to modify the methodology used to reconcile its electric POR Discount Percentage charged to ESCOs.

2 As a result, the Company is filing tariff revisions in compliance with the directive to revise the reconciliation of target C&C dollars attributable to retail access customers whose ESCOs participate in the Company s POR program and C&C recoveries associated with such customers ( POR C&C Reconciliation ). In addition to the Electric Tariff Leaves, the Company is also including an illustrative version of a new statement which shows the components of the POR Discount Percentage. Tariff Changes Pursuant to the Order, the Company is filing changes to its Electric Tariff as described below. General Rule , Consolidated Billing and Payment Processing Services, has been expanded to include a more detailed description of the POR Discount Percentage, which is comprised of four components: 1. Uncollectible Bill Percentage based on the Company's actual uncollectible bill experience applicable to electric and gas customers for the 12-month period through the previous November; 2. Risk Factor - equal to 15 percent of the Uncollectible Bill Percentage; 3. Credit and Collections (a) a ratio of the Company s credit and collection expenses attributable to retail access customers whose ESCOs participate in the Company s POR program and the estimated electric supply costs to be billed on behalf of ESCOs through the POR program; and (b) a percentage that reflects a reconciliation of prior periods credit and collections expenses and recoveries, plus interest; 4. Incremental Cost set at 0.15 percent Component 3.(b) above has been added to the POR Discount Percentage to assess the POR C&C Reconciliation on ESCOs. A new Statement of Purchase of Receivables Discount Percentage has been drafted for illustrative purposes as shown in Appendix A, to show the components of the POR Discount Percentage. General Rule 28, Transition Adjustment for Competitive Services, has been revised to reflect that, effective January 1, 2019, the POR C&C Reconciliation will be included in the C&C component of the POR Discount Percentage. Additionally, the reconciliation of competitive C&C-related charges reflected in the Merchant Function Charge has been modified to specify that, effective January 1, 2019, it will apply only to full service customers. 2

3 Conclusion and Notice As directed by Ordering Clause 3 of the Order, the Company is filing changes to the Electric Tariff to become effective January 1, The Company will provide public notice of the tariff changes in this filing by means of newspaper publication once a week for four consecutive weeks prior to the effective date of the proposed tariff changes. Included is a proposed form of Notice of Proposed Rule Making for publication in the State Register pursuant to the State Administrative Procedures Act. Sincerely, /s/ William A. Atzl, Jr. Director Rate Engineering Department 3

4 Appendix A PSC NO: 10 Electricity Statement Type: DISC Consolidated Edison Company of New York, Inc. Statement No.: Effective Date: 01/01/2019 Issued in compliance with order in Case 17-G-0794 dated 07/13/2018 Statement of Purchase of Receivables Discount Percentage The below percentages are applicable to retail access customers whose ESCOs participate in the Company s Purchase of Receivables ( POR ) program, pursuant to General Rule The total of the percentages comprise the POR Discount Percentage. 1) Uncollectible Bill Percentage... X.XX% 2) Risk Factor... X.XX% 3) Credit and Collections Component (including reconciliation)... X.XX% 4) Incremental Cost Component... X.XX% POR Discount Percentage... X.XX% Issued by: William A. Atzl, Jr., Director, Rate Engineering, New York, NY

5 PROPOSED RULEMAKING NO HEARING(S) SCHEDULED Tariff Filing by Consolidated Edison Company of New York, Inc. I.D. No. PSC- PURSUANT TO THE PROVISIONS of the State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule: Proposed action: The Commission is considering a proposal filed by Consolidated Edison Company of New York, Inc. ( Con Edison or the Company ) to revise its electric tariff, Schedule for Electricity Service, P.S.C. No. 10 Electricity ( Electric Tariff ), to comply with the directive to revise the reconciliation of target credit and collection and theft ( C&C ) dollars attributable to retail access customers whose energy service companies ( ESCOs ) participate in the Company s Purchase of Receivables ( POR ) program and C&C recoveries associated with such customers ( POR C&C Reconciliation ). Statutory authority: Public Service Law Sections 65 and 66 Subject: Proposed revisions to the reconciliation of target C&C dollars attributable to retail access customers whose ESCOs participate in the Company s POR program and C&C recoveries associated with such customers. Purpose: To consider electric tariff revisions related to the modifications of the Company s POR reconciliation process. Substance of the proposed rule: The Public Service Commission is considering a filing made on July 30, 2018, by Con Edison to revise its Electric Tariff. Con Edison proposed, in compliance with the Commission s directive in its Order Modifying Reconciliation of Gas Purchase of Receivables issued and effective July 13, 2018 in Case 17-G-0794, to modify the Company s Purchase of Receivables ( POR ) program as explained in General Rules and 28. The Company proposed to revise the reconciliation of target credit and collection and theft ( C&C ) dollars attributable to retail access customers whose energy service companies ( ESCOs ) participate in the Company s POR program and C&C recoveries associated with such customers ( POR C&C Reconciliation ). Major changes related to the POR program include: 1) Consolidated Billing and Payment Processing Services, has been expanded to include a more detailed description of the POR Discount Percentage; 2) Transition Adjustment for Competitive Services, has been revised to reflect that, effective January 1, 2019, the POR C&C Reconciliation will be included in the C&C component of the POR Discount Percentage; and 3) The reconciliation of competitive C&C-related charges reflected in the Merchant Function Charge has been modified to specify that, effective January 1, 2019, it will apply only to full service customers. In addition, an illustrative version of a new Statement of Purchase of Receivables Discount Percentage has been drafted to show the components of the POR Discount Percentage. The proposed amendments have an effective date of January 1, The

6 Commission may adopt, reject, or modify, in whole or in part, the relief proposed and may resolve related matters. Text of proposed rule and any required statements and analyses may be obtained by filing a Document Request Form (F-96) located on our website For questions, contact: Elaine Agresta, Public Service Commission, 3 Empire State Plaza, Albany, New York , (518) , Elaine.Agresta@dps.ny.gov. Data views or arguments may be submitted to: Kathleen H. Burgess, Public Service Commission, Bldg. 3, Empire State Plaza, Albany, NY , (518) Public Comment will be received until: 60 days after the publication of this notice. Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement Statements and analysis 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.

7 PSC NO: 10 Electricity Leaf: 146 Consolidated Edison Company of New York, Inc. Revision: 2 Initial Effective Date: 01/01/2019 Superseding Revision: 1 Issued in compliance with order in Case 17-G-0794 dated 07/13/ Retail Access Program Continued GENERAL RULES 19.3 Energy Service Company ( ESCO ) Participation - Continued Consolidated Billing and Payment Processing Services Subject to limitations set forth below, an ESCO and the Company may agree for one party to perform consolidated billing and payment processing services on behalf of the other. Billing and payment processing services are governed by the terms and provisions of retail access billing and payment processing practices as specified in the UBP and by such other terms and conditions not inconsistent with otherwise applicable laws, regulations, and PSC orders. If an ESCO and the Company agree for one party to perform consolidated billing and payment processing services on behalf of the other, the Company and ESCO will execute a billing services agreement. The Company will provide Consolidated Bills in connection with the Purchase of Receivables ( POR ) program pursuant to the Consolidated Utility Billing Service and Assignment Agreement executed by the Company and the ESCO; provided, however, that Consolidated Bills are not available to Customers served under Special Provision G of SC 9 for all or part of their energy requirements. Consolidated Bills for residential Customers are limited to Company-issued Consolidated Bills. An ESCO may provide Consolidated Bills for its Customers who are not Residential Customers. Under the POR program, the Company shall remit to the ESCO undisputed ESCO charges billed to its customers, reduced by the POR Discount Percentage. The POR Discount Percentage shall consist of an Uncollectible Bill Percentage, a Risk Factor, a Credit and Collections component and an Incremental Cost component associated with POR program administration. The four components will be set annually and become effective each January 1. The Uncollectible Bill Percentage shall be based on the Company's actual uncollectible bill experience applicable to electric and gas customers for the 12-month period through the previous November. The Risk Factor shall be equal to 15 percent of the Uncollectible Bill Percentage. The Credit and Collections component will include: (a) a percentage determined by dividing the Company s credit and collection expenses attributable to retail access customers whose ESCOs participate in the Company s POR program by the estimated electric supply costs to be billed on behalf of ESCOs through the POR program; and (b) effective January 1, 2019, a percentage that reflects a reconciliation of prior periods credit and collections expenses and recoveries, plus interest (calculated at the Other Customer Capital Rate). The Incremental Cost component shall be set to 0.15 percent. A statement showing the POR Discount Percentage will be filed with the Commission on no less than three days notice. If the Company determines, in its sole discretion, that an ESCO is not in compliance with the dispute resolution procedure specified in the Consolidated Utility Billing Service and Assignment Agreement, the Company will assess a charge to the ESCO equal to the amount disputed by the Customer. Issued by: Robert Hoglund, Senior Vice President & Chief Financial Officer, New York, NY

8 PSC NO: 10 Electricity Leaf: 360 Consolidated Edison Company of New York, Inc. Revision: 2 Initial Effective Date: 01/01/2019 Superseding Revision: 1 Issued in compliance with order in Case 17-G-0794 dated 07/13/ Transition Adjustment for Competitive Services 28.1 Applicability GENERAL RULES A Transition Adjustment will be determined for Customers served under this Rate Schedule, except for Customers served under SC Components of the Transition Adjustment The Transition Adjustment will be the sum of the following components, based on the 12 months ending December, except as described in General Rule 28.3: (a) the difference between the targeted level of revenues from competitive supply-related charges (including purchased power working capital) reflected in the Merchant Function Charge ( MFC ) and billed revenues from the competitive supply-related component of the MFC; (b) the difference between the targeted level of revenues from competitive credit and collection-related charges reflected in the MFC and billed revenues from the competitive credit and collection-related components of the MFC; (c) the Company s lost revenues attributable to the Billing and Payment Processing ( BPP ) Charge. The lost revenues attributable to the BPP will be equal to the total BPP charges that are avoided by Customers (as detailed in General Rule 26.3) less charges paid by ESCOs for Company-issued Consolidated Bills less costs avoided by the Company when ESCOs issue Consolidated Bills; (d) the Company s lost revenues attributable to Metering Services. The lost revenues attributable to Metering Services will be equal to the total Metering Services charges (i.e., the total of meter ownership charges, meter service provider charges, and meter data service provider charges) that are avoided by Customers who take Metering Services competitively less the costs that are avoided by the Company when Metering Services are taken competitively; and (e) prior to January 1, 2019, the difference between the targeted level of credit and collection costs reflected in the Purchase of Receivables ( POR ) Discount Percentage applicable to ESCOs under the POR program and revenues from the credit and collection-related component reflected in the POR Discount Percentage. Effective January 1, 2019, this difference, and any prior period reconciliations, will be reflected in the Credit and Collections component of the POR Discount Percentage as described in General Rule Issued by: Robert Hoglund, Senior Vice President & Chief Financial Officer, New York, NY

9 PSC NO: 10 Electricity Leaf: 361 Consolidated Edison Company of New York, Inc. Revision: 3 Initial Effective Date: 01/01/2019 Superseding Revision: 2 Issued in compliance with order in Case 17-G-0794 dated 07/13/2018 GENERAL RULES 28. Transition Adjustment for Competitive Services - Continued 28.3 Calculation of the Transition Adjustment The Transition Adjustment that commences each January will be in effect for a 12-month period and will be based on the 12 months ending December of the prior year. Each Transition Adjustment will include any Reconciliation Amounts from the Transition Adjustment in effect for prior periods and prior period deferrals. The Reconciliation Amount is the difference between the amount to be recovered through the Transition Adjustment and the actual amount recovered through the Transition Adjustment, plus interest (calculated at the Other Customer Capital Rate). The Transition Adjustment commencing January 2018 will also collect differences in the targeted level of revenues and recoveries for components (a) and (d) and revenue shortfalls for components (b) and (c) of General Rule 28.2 that result from extension of the Case 16-E-0060 suspension period, plus interest at the Other Customer Capital Rate. The Company may adjust the Transition Adjustment for the remaining months of a collection period on not less than three days prior notice if the total deferred debit or credit amount exceeds $5 million. For periods prior to January 1, 2019, half of the amount to be collected from or credited to Customers through the Transition Adjustment will be assigned to Full Service Customers; the balance will be collected from or credited to both Full Service and Retail Access Customers. Effective January 1, 2019, the Transition Adjustment will consist of the components (a) through (d) described in General Rule These components will be collected from or credited to Customers through the Transition Adjustment in the following manner: component (b) will apply to Full Service Customers only; and half of the amounts related to components (a), (c) and (d) will apply to Full Service Customers, while the balance related to components (a), (c) and (d) will apply to both Full Service and Retail Access Customers. To determine the per-kwhr Transition Adjustment (which will be expressed to the nearest cent per kwhr), the amounts to be collected from or credited to Customers will be divided by the estimated kilowatthour deliveries for the total period in which the Transition Adjustment is to be in effect. If the above calculation results in a Transition Adjustment of less than cent per kwhr, the total amount to be recovered from or credited to Customers will be deferred, with interest, for later recovery or refund through application to Customers bills in a subsequently determined Transition Adjustment. The Transition Adjustment will be calculated on an annual or more frequent basis, as provided herein. The per-kilowatthour adjustment to be put into effect for Full Service and Retail Access Customers will be passed through the Adjustment Factor MAC described in General Rule The per-kilowatthour adjustment to be put into effect for Full Service Customers will be passed through the Merchant Function Charge described in General Rule Issued by: Robert Hoglund, Senior Vice President & Chief Financial Officer, New York, NY