In two recent rulings, the New York Public Service Commission (PSC) has authorized electric utilities to call upon ratepayers to help cover losses from rate discounts and write off sunk investment in nuclear power plants. Ratepayer contributions in each case will come through incentive clauses by which revenues or losses are shared on an 80-20 basis between customers and company stockholders.
Rate Discounts. In one case, the PSC allowed Niagara Mohawk Power Corp. to recover from ratepayers 80 percent of a recent decline in revenues from to increased rate discounting to retain existing load and thus support the state's manufacturing base. (The losses had exceeded the company's projection by $29.8 million.) The decision appears consistent with earlier PSC generic findings on revenues and discounting, and with the utility's prior rate case, in which the PSC approved an 80/20 sharing plan between customers and shareholders. A surcharge was not needed, the PSC explained, since the utility had recently collected enough unanticipated revenues from sales for resale to offset the revenues lost to increased discounting.