Con Edison Customers to Receive Small Rebate

- Consolidated Edison has agreed to refund nearly $45.5 million to its customers and forgo $89.5 million in rate increases as part of a settlement over shutdowns at the Indian Point 2 nuclear plant, New York State officials announced recently.

The proposed settlement with the state ends a three-year legal battle by state officials to prevent the utility, which no longer owns the plant, from charging ratepayers for the extra costs it incurred to buy replacement electricity during four unplanned shutdowns between 1997 and 2000. One shutdown, which began in February 2000, lasted nearly a year, because of a small radioactive leak from a ruptured steam generator tube at the plant in northern Westchester County.

State officials led by Assemblyman Richard L. Brodsky, a Democrat of Westchester, had contended that Con Edison's negligence in operating the plant led to the shutdowns and that, as a result, the utility should bear all the costs.

"This is a wonderful Christmas present for the ratepayer," Mr. Brodsky said during a news conference at City Hall in New York. "We're here to make sure the ratepayer doesn't pay for the negligence of the utility."

Con Edison, which has 3.1 million customers in New York City and Westchester, has repeatedly rejected these claims, and the settlement does not include any admission of wrongdoing, state officials said. The utility sold the plant — in Buchanan, N.Y., about 35 miles north of Midtown Manhattan — to the Entergy Corporation in 2001.

In a written statement, Con Edison said, "We continue to believe we acted prudently throughout the process and look forward to putting this matter behind us."

The $45.5 million refund will appear as a credit on electric bills for three successive months, beginning as early as this winter, and the amount will vary depending on power use. It means an average savings of $3.90 for customers in New York City and $5.85 for those in Westchester, Con Edison said.

In addition, Con Edison will set aside $2.5 million to help pay for energy-efficiency programs for low-income families.

As part of the $137.5 million settlement, it will also absorb additional costs for buying power that have not yet been billed to ratepayers.

State legislators had previously tried to block Con Edison from passing on the extra costs to ratepayers by passing a law in 2000. Con Edison successfully sued in federal court to overturn the law, saying, among other things, that the utility was being unfairly singled out.

The State Public Service Commission, at the request of Gov. George E. Pataki and other elected officials, also ordered a formal inquiry into the plant's operations. A spokesman for the commission said yesterday that it could approve the settlement as early as February.