The New York State Public Service Commission has ordered that Consolidated Edison Company of New York, Inc. provide $18 million for the benefit of ratepayers after the company failed to meet certain reliability threshold targets for interruption frequency and duration in its network and radial systems.

“One of the Commission’s foremost areas of concern is to ensure that electric distribution systems are safe and reliable,” said Commission Chairwoman Patricia L. Acampora. “Con Edison did not meet four targets for system-wide reliability in 2006. As a result of the utility’s failure to meet these important targets, shareholders are directed to provide a credit to ratepayers.

Hopefully, this sends a message to Con Edison that they must be diligent in efforts to maintain a reliable network, or they will face financial consequences.”

Earlier this year, Con Edison filed its annual performance report for 2006 describing the company's compliance with its electric service Reliability Performance Mechanism (RPM). The company reported that it failed to meet four threshold targets: network interruption frequency; radial interruption frequency; network interruption duration; and radial interruption duration.

Under the terms of the RPM, these failures result in an $18 million revenue adjustment that is to be deferred for the benefit of ratepayers.

The RPM was adopted as part of Con Edison's rate plan in 2004 and consists of six performance areas that the company must achieve in providing electric service to customers. The six performance areas are: threshold standards consisting of system-wide reliability targets; a major outage metric; a program standard for repairs to damaged poles; a program standard for the removal of temporary shunts; a program standard for the repairs of "no current" street lights and traffic signals; and a program standard for the replacement of over duty circuit breakers.

Con Edison is required to defer shareholder money for the benefit of ratepayers if it fails to meet the performance metrics within each area. The maximum deferral is $59 million. The threshold standards consist of four system-wide reliability targets: network interruption frequency; radial (non-network) interruption frequency; network interruption duration; and radial interruption duration. The network and radial interruption frequency is a measure of the average number of times a customer served by Con Edison is interrupted in a year. The revenue adjustment for not meeting each frequency target is $5 million. The network and radial interruption duration is a measure of the average interruption time in hours by customers that experience a sustained interruption in a given year. The revenue adjustment for not meeting each duration target is $4 million.