New York City – Con Ed Faces New Benchmark for Blackouts

New York City – Those who lost power for nine days two summers ago might be surprised to learn that Consolidated Edison did not consider the event a major power failure — at least in the strictest, legal sense. But that just changed.

The utility received a black eye for the way it handled the Queens blackout, but according to Con Edison’s Reliability Performance Mechanism, a “major outage” is when all the feeders, or circuits, that supply a local network are shut down for three or more hours. In the July 2006 blackout, not all of the 22 feeders serving western Queens failed.

The benchmark is important because it helps determines the utility’s financial liability. In April, Con Edison agreed to spend $17 million to compensate customers affected by the Queens power failure. The settlement still must be approved by state regulators.

On Wednesday, the New York State Public Service Commission lowered the threshold [pdf] for what constitutes a “major outage.” Now, a major power failure occurs when service is interrupted to 10 percent or more of Con Edison’s customers in any network for a period of three hours or more.

“Con Edison’s 2006 Long Island City network outages and Westchester County outages had a significant impact on customers, but did not meet the threshold of a major outage for triggering a revenue adjustment under the company’s Reliability Performance Mechanism,” Commission Chairman Garry Brown said in a statement. “These events warranted the Commissions re-evaluation of Con Edison’s major outage metric to improve our incentive program for electric system performance reliability.”

Alyssa Bonilla, who works with Western Queens Power for the People Campaign, a group formed after the blackout, said any change that “lowers the threshold that makes Con Ed liable for its product is a good thing.” But she warned that the new benchmarks left Con Edison with plenty of wiggle room.

For example, customers who have low voltage are not counted as affected by a power failure, even though they may not be able to use their appliances. And even if these customers can use some, but not all of their appliances, they may be affected because their bank and supermarket nearby might not have power.

The new benchmark applies to all power failures, except those that “are beyond the control of the company.” That means if a tornado rips through Queens and downs power lines, the benchmarks do not apply.

Even when a major power failure does occur, the new rules do not mean customers will automatically get a refund. Instead, the rules say that Con Edison will not be able to raise rates as much as they want during its next rate case. The rules say that the company could be penalized up to $10 million three times in a year.

Last month, Con Ed, which provides power to New York City and Westchester County, said it would ask state regulators for at least $557 million more in annual revenue from its customers.