By: Bill Sanderson |

Consolidated Edison’s agreement to freeze New Yorkers’ gas and electricity delivery rates over the next several years actually contains a built-in rate increase, according to an analysis by the AARP.

To avert the increase, Con Edison and New York state regulators will have to take action and set new rates when the two-year electric and three-year gas price freezes expire, the AARP said last week.

If no action is taken and the rate freeze expires, Con Ed could collectively raise customers’ electric bills by $47.7 million in 2016 and gas bills by $40.8 million in 2017, the AARP calculated.

Whether that scenario comes to pass is an open question—but rate orders often expire without action by either regulators or Con Ed. The utility’s current gas and electric prices are based on a rate order that expired in March 2013.

The state Public Service Commission is seeking public comment on the proposed rate freezes, which faces a final vote at a commission meeting in February.

“We need to invest in our energy delivery systems to continue providing industry-leading reliable service and to fortify our systems against extreme weather events, which are becoming more frequent and severe. We plan to make these investments while continuing to carefully control our costs,” Con Edison said.

New York Gov. Andrew Cuomo, who announced the agreement Dec. 31, called it “customer-friendly.” He said the agreement stemmed from his call last October for the state Public Service Commission to reject Con Ed’s bid for a rate increase that would boost electric bills by about 4% and gas bills by about 1.5%.

But AARP also complains that Mr. Cuomo is backing away from efforts by the Utility Intervention Unit, a component of the Department of State, to slash Con Ed’s rates, which include the highest residential electricity prices charged by any big-city U.S. utility.

“Why aren’t we starting a discussion about how Con Ed can lower rates?” said William Ferris, AARP’s state legislative director.

Gov. Cuomo’s office didn’t respond to a request for comment.

The freeze doesn’t cover the commodity prices of electricity and natural gas, which aren’t regulated by the state and account for about half of a typical utility bill.

AARP says the state’s handling of Con Ed rate case shows the need for an independent state office to represent consumers in utility rate cases. Bills establishing such an office are now pending in the state Legislature.