Con Edison's Rate Plan Shows How New York Sets Utility Rates, From Filing to Vote
New York utility rates are set in a public, multi-stage Commission process. Con Edison's January 2026 plan shows how each stage works, and what it approved.
A change to what a New York utility may collect for delivering electricity or gas does not take effect by announcement. It goes through the Public Service Commission, in a process with defined parties, hearings, deadlines and a final vote at a public session.
In January 2026 the Commission approved a three-year electric and gas plan for Con Edison that was far smaller than the company had requested. The case shows each stage of the process, and it also shows where the sources on its outcome differ.
Who takes part in a rate case
Every major rate case has a core set of participants. The Department of Public Service always takes part through a trial staff team. That team reviews the utility's filing and represents the public interest.
Other parties may intervene. The Department's overview names municipalities, large customers and special-interest groups as examples. Members of the public may also comment or make statements at hearings.
The utility is the party asking for the change. It must show why the increase is needed and file expert testimony with its request, and that filing is the starting point for every other party's review.
The filing and the 11-month clock
A rate case starts when a utility asks to change its delivery rates. The electric and gas requests in the Con Edison case carried separate case numbers, 25-E-0072 and 25-G-0073, in the Department's document system.
An Administrative Law Judge is assigned early. The judge sets the schedule, decides who has party status and holds conferences. In the first four months, parties mainly use written questions, called interrogatories, to test the filing. A public statement hearing may be held at this stage.
The Department says a case is generally completed within 11 months of the request. Its overview does not describe a suspension period, so that timeline is the only one it sets out.
Litigated cases and settlements
In a litigated case, parties file direct and rebuttal testimony in months five to seven. A judge then presides over a trial-style evidentiary hearing with sworn testimony and cross-examination. A court reporter prepares a transcript, and the parties file briefs. The judge may issue a recommended decision around months seven to nine. Parties can then file exceptions identifying alleged errors, and the Commission decides in months nine to eleven.
The alternative is a settlement, which the Department's overview describes as an alternative path. Before talks begin, the utility files a notice of impending negotiations that describes the issues and the parties. The talks are confidential. Parties may ask for a settlement judge, who cannot be the presiding judge.
If the parties agree, they sign a Joint Proposal setting out how the Commission should decide the case, often including multi-year rates. A Joint Proposal still goes through review. The judge typically sets a schedule with briefs for and against it, an evidentiary hearing and further briefing. The Commission then decides at a public session.
Public statements versus sworn evidence
Two kinds of hearing run in a rate case, and they serve different functions. A public statement hearing takes unsworn statements, and parties cannot cross-examine the speakers. An evidentiary hearing involves sworn testimony and cross-examination, and it produces a transcript.
The Con Edison case drew heavy public involvement. Department staff reviewed thousands of public comments, and the Commission held more than a dozen in-person and virtual public statement hearings, along with an evidentiary hearing. Habitat Magazine reports that the original proposal drew more than 20,000 public comments, mostly in opposition.
Habitat also reports that more than 70 city and state officials signed a letter urging the Commission to reject the proposal. The Commission nonetheless adopted the plan, and Gothamist reports that the vote was unanimous.
“A rate case is a trial-style proceeding that ends in a vote held in public.”
What the Con Edison plan approved in January 2026
On January 22, 2026, the Commission adopted a joint proposal for a three-year electric and gas plan. Gothamist reports that the vote was unanimous. According to Habitat, the PSC spokesman, James Denn, described the plan as a settlement that invests in reliability, safety and the clean energy transition while controlling costs.
The electric request was an increase of about $1.6 billion in first-year delivery revenue. The Commission approved increases of $234 million in year one, $409.7 million in year two and $421.1 million in year three. The press release's headline describes the first-year cut as nearly 90 percent; its body text puts the cut at nearly 87 percent, a reduction of more than $1.37 billion.
The gas request was an increase of about $349 million. The approved gas increases were $27.5 million, $68.8 million and $70.3 million across the three years. The plan sets a return on equity of 9.40 percent. A lawmakers' letter, cited by Habitat, says that figure is higher than in other recent rate cases. The article does not verify that comparison.
Habitat reports that Con Edison originally sought a 13 percent gas increase and a 19 percent electricity increase, and that the approved increases are considerably lower. Con Edison says the revised increases are in line with inflation, which Habitat puts at 2.7 percent. The sources do not say how the percentages were calculated, and they are not reconciled with the dollar figures above.
Seventeen parties either signed the joint proposal or did not oppose it. Twelve submitted it, and five more did not oppose it.
Bill figures and effective dates
The rate increases apply from January 1, 2026, even though the vote came on January 22. Gothamist reports that the increases take effect retroactively to the start of the year, and Habitat gives the same effective date.
Gothamist reports average annual increases. Electric bills rise 3.5 percent in 2026, 3.2 percent in 2027 and 3.1 percent in 2028. Gas bills rise 4.4 percent, 5.7 percent and 5.6 percent over the same years. Habitat repeats these percentages.
Gothamist also gives dollar amounts, which Habitat repeats: New York City residents would pay about $6.88 more a month for electricity this year, and an average monthly gas increase of $10.67 this year. These dollar figures come from news reports and should be checked against the order.
A lawmakers' letter cited by Habitat reported 564,520 customers with arrears more than 60 days old as of December 2024, totaling $1.49 billion. Those figures describe customers already behind on their bills, and they appear in the same coverage as the rate increase.
The PSC press release reviewed for this article does not state bill effects. The percentages and dollar amounts therefore rest on news reports, and the Commission's order should be checked before they are repeated. Under the Department's overview, rates set in a litigated case, or in the final year of an approved plan, stay in effect until the utility files another rate case.
