# ConEd Rider Charges: A Complete Explainer

> ⚠️ **Disclaimer**: This guide was generated by an LLM (Claude Opus 4.5) based on the tariff JSON plus the model's background knowledge of NY energy policy, VDER proceedings, and utility programs. The content looks reasonable but **has not been verified by domain experts**. Please verify any claims before relying on them for business or regulatory purposes.

## What Are Riders?

Riders are **modular tariff components** that can be attached to multiple base tariffs. Instead of updating every residential, commercial, and industrial tariff when a new program launches, ConEd creates a single rider that applies across rate classes.

### How Riders Appear in the JSON

Riders have a **two-part structure** in the tariff:

**1. Rider Reference** (placeholder with `riderId`):

```json
{
  "rateName": "CBC Rider",
  "riderId": 3399165,  // ← Links to rider tariff
  "chargeType": null,  // ← No charge info here
  "rateBands": []
}
```

**2. Rider Implementation** (actual rate with `riderTariffId`):

```json
{
  "rateName": "Customer Benefit Contribution",
  "riderTariffId": 3495063,  // ← This IS the rider
  "chargeType": "QUANTITY",
  "rateBands": [{ "rateAmount": 1.84, ... }]  // ← Actual rate
}
```

**For bill calculation, use the rates with `riderTariffId`** — they have all the charge details already resolved.

### When to Query the Rider Tariff Separately

You typically don't need to. The main tariff includes resolved rider rates. However, you might query `GET /tariffs/{riderId}` to:

- See which other base tariffs reference this rider
- Check the rider's own effective dates or applicability rules
- Audit or document the rider structure independently

---

## Overview of ConEd Riders

| Rider              | What It Funds                  | Who Pays             | Typical Impact |
| ------------------ | ------------------------------ | -------------------- | -------------- |
| Tax Sur-Credit     | Tax over/under-collection      | All customers        | ±$0-2/month    |
| DLM Surcharge      | Demand response programs       | All customers        | ~$0.50/month   |
| CBC                | Solar customer grid costs      | Solar customers only | $1.84/kW/month |
| EV Make Ready      | EV charging infrastructure     | All customers        | ~$0.40/month   |
| Arrears Management | COVID debt forgiveness         | All customers        | ~$0.60/month   |
| GRT                | Municipal gross receipts taxes | All customers        | 4-9% of bill   |
| VDER Cost Recovery | Solar compensation payments    | All customers        | ~$0.55/month   |

---

## Tax Sur-Credit

### The Problem It Solves

Utility rates include assumptions about tax costs (property taxes, federal income taxes, etc.). When actual taxes differ from what's embedded in rates, this rider trues up the difference.

### Origin Story

**2017: Federal Tax Reform**

The Tax Cuts and Jobs Act of 2017 slashed the corporate tax rate from 35% to 21%. ConEd's rates had been set assuming 35%, meaning:

- Customers were overpaying for taxes ConEd no longer owed
- PSC ordered utilities to pass savings back to customers
- Tax Sur-Credit rider was created/expanded to handle this

**Ongoing: Property Tax Fluctuations**

Property taxes on ConEd's infrastructure (substations, poles, etc.) change annually. The rider captures variances from rate case assumptions.

### How It Works

```
Tax Sur-Credit = (Taxes Embedded in Rates - Actual Taxes Paid) / kWh Sales
```

- **Positive value** = Surcharge (ConEd under-collected)
- **Negative value** = Credit (ConEd over-collected, you get money back)

### Example

```
Rate case assumed: $500 million in taxes
Actual taxes paid: $450 million (federal rate cut)
Over-collection: $50 million

Tax Sur-Credit = -$50 million / 40 billion kWh = -$0.00125/kWh (CREDIT)
```

For a 500 kWh/month customer: **-$0.63/month credit**

### Current Status

Post-2017, customers received significant credits. As rate cases catch up to the new tax reality, this rider trends toward zero but still captures ongoing property tax variances.

### Variable Rate Key

```json
"variableRateKey": "taxSurCreditSC1"
```

---

## Dynamic Load Management (DLM) Surcharge

### The Problem It Solves

New York's grid faces growing peak demand, especially on hot summer days. Building new power plants and transmission lines is expensive and carbon-intensive. **Demand response** is cheaper: pay customers to reduce usage during peaks instead of building more infrastructure.

### Origin Story

**2014: Reforming the Energy Vision (REV)**

NY launched REV to modernize the grid and integrate distributed resources. Demand response became a key pillar.

**2018: ConEd's Brooklyn-Queens Demand Management Program**

Rather than build a $1 billion substation in Brooklyn, ConEd invested $200 million in:

- Battery storage
- Demand response programs
- Distributed solar
- Energy efficiency

The program proved demand-side solutions could defer infrastructure investment.

**2019+: DLM Programs Expanded**

ConEd now runs multiple demand response programs:

- **Commercial System Relief Program (CSRP)**: Large customers curtail during emergencies
- **Distribution Load Relief Program (DLRP)**: Targeted local relief
- **Smart AC Program**: Residential AC cycling
- **Battery storage incentives**: Behind-the-meter batteries discharge during peaks

### What the Surcharge Funds

| Program Component           | Purpose                                    |
| --------------------------- | ------------------------------------------ |
| Customer incentive payments | Pay participants to reduce load            |
| Battery dispatch payments   | Compensate storage for discharging         |
| Program administration      | ConEd staff, technology platforms          |
| Evaluation & measurement    | Verify demand reductions actually occurred |

### How It Works

```
DLM Surcharge = Annual DLM Program Costs / Annual kWh Sales
```

The surcharge is per-kWh because:

1. All customers benefit from avoided infrastructure
2. Larger users (more kWh) benefit proportionally more

### Example: Why This Makes Economic Sense

```
Without DLM:
- Build new peaker plant: $300 million capital cost
- 30-year life → $10 million/year (plus fuel, O&M)
- Runs 100 hours/year during peaks
- Cost per peak kWh: Very high

With DLM:
- Pay customers $1/kWh to reduce 100,000 kWh during peaks
- Annual cost: $100,000
- No capital investment, no emissions
- All ratepayers share $100,000 cost
```

The surcharge exists because demand response creates **system-wide benefits** (lower costs, fewer emissions, more reliability) that all customers share.

### Current Typical Value

~$0.001/kWh → ~$0.50/month for typical residential customer

### Variable Rate Key

```json
"variableRateKey": "dynamicLoadManagementSurcharge2252SC1"
```

---

## Customer Benefit Contribution (CBC)

### The Problem It Solves

Solar customers use the grid differently than non-solar customers:

- They export power during the day (grid must absorb it)
- They draw power at night and cloudy times (grid must serve them)
- They still need the grid as backup (full capacity must be maintained)

Under old net metering, solar customers avoided paying most delivery charges but still relied on the grid. This shifted costs to non-solar customers—the "cost shift" debate.

### Origin Story

**2017: Value of Distributed Energy Resources (VDER) Order**

The NY PSC overhauled solar compensation:

- Replaced retail net metering with "Value Stack" compensation
- Solar exports are valued based on actual grid benefits (energy, capacity, environmental)
- Created the CBC to ensure solar customers pay for grid services they use

**The Compromise**

- **Solar advocates** wanted continued strong incentives
- **Utilities** wanted solar customers to pay grid costs
- **Result**: CBC charges solar customers a modest fee based on system size

### How It Works

```
Monthly CBC = Solar System Size (kW) × CBC Rate ($/kW)
```

Current rate: **$1.84/kW/month**

### Example

```
Customer with 8 kW rooftop solar system:
CBC = 8 kW × $1.84/kW = $14.72/month
```

### Who Pays

**Only customers with solar** (or other distributed generation). If `systemSize = 0` in the calculation inputs, CBC = $0.

### The Intuition

Think of CBC as a **"grid access fee"** for solar customers:

- You're using the grid as a giant battery (export midday, import evening)
- You need grid capacity for cloudy days and nights
- The fee ensures you pay something toward that infrastructure

### Why It's Based on System Size (kW), Not Usage (kWh)

The grid must be sized to handle your **maximum possible export or import**, which correlates with system size:

- 4 kW system → grid must handle 4 kW flows
- 12 kW system → grid must handle 12 kW flows

Larger systems create more grid capacity needs, hence the $/kW structure.

### Fixed Rate (Not Variable)

Unlike most riders, CBC has a fixed rate in the tariff:

```json
"rateAmount": 1.84,
"rateUnit": "COST_PER_UNIT",
"quantityKey": "systemSize"
```

---

## Electric Vehicle Make Ready Surcharge

### The Problem It Solves

New York is pushing aggressive EV adoption to meet climate goals. EVs need charging infrastructure. The "make-ready" work—installing conduit, wiring, transformers, and panels up to the charger—is expensive and slows deployment.

### Origin Story

**2020: NY PSC EV Make-Ready Order**

The PSC ordered utilities to fund "make-ready" infrastructure for EV charging:

- ConEd must spend ~$300 million over several years
- Covers costs up to the charger (not the charger itself)
- Targets public charging, fleet depots, and multi-family buildings

**The Goal**

Remove infrastructure as a barrier to EV adoption. Property owners install chargers more readily if ConEd covers the electrical upgrades.

### What It Funds

| Component              | What ConEd Pays For                               |
| ---------------------- | ------------------------------------------------- |
| Utility-side work      | Transformer upgrades, new service drops           |
| Customer-side work     | Conduit, wiring, panels (to the charger location) |
| Program administration | Application processing, inspections               |

### How It Works

```
EV Make Ready Surcharge = Annual Program Costs / Annual kWh Sales
```

### Example: Why Socializing Costs Makes Sense

```
Individual approach:
- Property owner wants to install 10 EV chargers
- Electrical upgrades cost $150,000
- Project abandoned—too expensive

Make-ready approach:
- ConEd covers $150,000 in make-ready costs
- Property owner pays only for chargers (~$30,000)
- Project proceeds
- Cost spread across all ratepayers: $0.0008/kWh
- For 500 kWh customer: ~$0.40/month
- Society gets EV infrastructure, reduced emissions
```

### Current Rate

**$0.0008/kWh** → ~$0.40/month for typical residential customer

### Why All Customers Pay

1. **Climate benefits**: Less transportation emissions benefits everyone
2. **Grid benefits**: EVs can eventually provide grid services (V2G)
3. **Economic development**: Charging infrastructure attracts businesses
4. **Precedent**: Similar to how all ratepayers funded the original electric grid

---

## Arrears Management Program Recovery Surcharge

### The Problem It Solves

During COVID-19, millions of New Yorkers fell behind on utility bills. NY imposed a moratorium on shutoffs, and debt accumulated. When moratoriums lifted, utilities faced:

- Massive unpaid balances
- Customers who couldn't pay without hardship
- Need to maintain service while recovering costs

### Origin Story

**March 2020: COVID Shutoff Moratorium**

NY banned utility disconnections during the pandemic. Customers who couldn't pay accumulated arrears.

**2021-2022: Arrears Forgiveness Programs**

The PSC and legislature created programs to:

- Forgive portions of low-income customer debt
- Create extended payment plans for others
- Provide state/federal funds to cover some arrears

**The Gap**

Even with assistance programs, utilities were left with unrecoverable debt beyond normal "uncollectible bill expense" levels. This surcharge recovers the extraordinary COVID-era shortfall.

### What It Funds

| Component                    | Description                                  |
| ---------------------------- | -------------------------------------------- |
| Forgiven debt                | Balances written off under hardship programs |
| State program administration | Processing assistance applications           |
| Extended payment plan losses | Time value of money on payment plans         |

### How It Works

```
Arrears Recovery Surcharge = COVID-Era Uncollectible Amount / kWh Sales Over Recovery Period
```

### The Scale

ConEd accumulated hundreds of millions in COVID-era arrears. The surcharge spreads recovery over several years to minimize bill impact.

### Example

```
COVID arrears to recover: $200 million
Recovery period: 5 years → $40 million/year
Annual sales: 40 billion kWh

Surcharge = $40 million / 40 billion kWh = $0.001/kWh
For 500 kWh customer: ~$0.50/month
```

### Current Rate

**$0.0012/kWh** → ~$0.60/month for typical residential customer

### Why It's Separate from Uncollectible Bill Expense

The regular "Uncollectible Bill Expense" adjustment handles **normal** bad debt (typically 1-2% of bills). COVID created **extraordinary** bad debt that would distort the normal mechanism. A separate rider provides:

- Transparency (customers see it as a distinct line item)
- Time-limited recovery (will eventually sunset)
- Regulatory accountability (PSC monitors specifically)

---

## Gross Receipts Tax (GRT)

### The Problem It Solves

New York municipalities levy taxes on utilities based on their gross receipts (revenue). These taxes fund local government services. The GRT rider passes these taxes through to customers transparently.

### Origin Story

**Long-standing municipal tax authority**

NY municipalities have taxed utilities for decades. Rates vary by jurisdiction based on local government decisions.

**Why It Varies by Zone**

ConEd serves three distinct areas with different tax authorities:

- **Zone J (NYC)**: NYC's tax rates
- **Zone I (Lower Westchester)**: Various Westchester municipalities
- **Zone H (Upper Westchester)**: Different Westchester municipalities

### How It Works

GRT is applied as a **percentage of your charges**, not per-kWh:

```
GRT = (Applicable Charges) × GRT Rate
```

It's split into two components:

- **GRT Distribution**: Applied to delivery charges
- **GRT Supply**: Applied to supply charges (if using ConEd supply)

### Current Rates

| Zone                  | GRT Distribution | GRT Supply | Total |
| --------------------- | ---------------- | ---------- | ----- |
| H (Upper Westchester) | 3.3322%          | 1.0101%    | 4.34% |
| I (Lower Westchester) | 5.5127%          | 3.0928%    | 8.61% |
| J (NYC)               | 4.7940%          | 2.4066%    | 7.20% |

### Example

```
Zone J (NYC) customer:
- Delivery charges: $80
- Supply charges: $50

GRT Distribution = $80 × 4.794% = $3.84
GRT Supply = $50 × 2.4066% = $1.20
Total GRT = $5.04
```

### Why Separate Distribution and Supply?

Different tax rules may apply to:

- **Distribution**: Charges for using ConEd's wires (always ConEd)
- **Supply**: Charges for electricity commodity (ConEd or ESCO)

If you use an ESCO, you don't pay ConEd's supply charges, so GRT Supply doesn't apply to ConEd portion.

### The QUANTITY Charge Type

In the JSON, GRT uses `chargeType: "QUANTITY"` with `rateUnit: "PERCENTAGE"`:

```json
{
  "rateName": "GRT Distribution - Zone J",
  "chargeType": "QUANTITY",
  "rateBands": [{
    "rateAmount": 4.794,
    "rateUnit": "PERCENTAGE"
  }]
}
```

The "quantity" here is the dollar amount of applicable charges, and the rate is a percentage.

---

## Value of Distributed Energy Resources (VDER) Cost Recovery

### The Problem It Solves

When solar systems (and other distributed generation) export power to the grid, ConEd must compensate them. Under NY's Value Stack tariff, these payments can be substantial. This surcharge recovers those costs from all ratepayers.

### Origin Story

**2017: The End of Net Metering**

Traditional net metering gave solar customers retail-rate credit for exports—often $0.20+/kWh. Critics argued this overvalued solar and shifted costs to non-solar customers.

**2017: Value of Distributed Energy Resources (VDER) Order**

The PSC replaced net metering with the "Value Stack":

- Solar exports are valued based on actual grid benefits
- Components: Energy, Capacity, Environmental, Demand Reduction, Locational

**The Value Stack Components**

| Component              | What It Values                          | Typical Value   |
| ---------------------- | --------------------------------------- | --------------- |
| Energy                 | Avoided wholesale energy cost           | ~$0.03-0.08/kWh |
| Capacity               | Avoided generation capacity             | ~$0.02-0.04/kWh |
| Environmental (E)      | Social cost of carbon                   | ~$0.02-0.03/kWh |
| Demand Reduction (DRV) | Avoided distribution investment         | $0.00-0.10/kWh  |
| Locational (LSRV)      | Avoided transmission/local distribution | $0.00-0.05/kWh  |

### How VDER Costs Arise

```
1. Solar system exports 1,000 kWh to grid
2. ConEd calculates Value Stack: $0.12/kWh average
3. ConEd pays solar owner: $120
4. ConEd needs to recover $120 from ratepayers
```

### How the Surcharge Works

```
VDER Cost Recovery = Total VDER Payments to DG Owners / Total kWh Sales
```

### Example: System-Wide Math

```
Annual VDER payments to solar owners: $50 million
Annual ConEd sales: 40 billion kWh

VDER Surcharge = $50 million / 40 billion kWh = $0.00125/kWh
For 500 kWh customer: ~$0.63/month
```

### Why All Customers Pay

1. **Grid benefit**: Solar reduces need for central generation and transmission
2. **Environmental benefit**: Lower emissions benefit everyone
3. **Policy decision**: NY chose to socialize DER costs to accelerate clean energy

### Relationship to CBC

These two riders are **complementary**:

- **CBC**: Solar customers pay for using the grid
- **VDER Cost Recovery**: All customers pay for solar exports to the grid

Together, they create a balanced framework where:

- Solar is fairly compensated for grid benefits
- Solar pays for grid services it uses
- Non-solar customers share clean energy transition costs

### Current Rate

**$0.0011/kWh** → ~$0.55/month for typical residential customer

---

## Summary: The Policy Story Behind Each Rider

| Rider              | Era           | Policy Driver                                           |
| ------------------ | ------------- | ------------------------------------------------------- |
| Tax Sur-Credit     | 2017+         | Federal tax reform, ongoing property tax changes        |
| DLM Surcharge      | 2014+         | REV grid modernization, demand response over generation |
| CBC                | 2017+         | VDER solar reform, ensuring solar pays for grid use     |
| EV Make Ready      | 2020+         | Transportation electrification, climate goals           |
| Arrears Management | 2020+         | COVID pandemic response, utility customer protection    |
| GRT                | Long-standing | Municipal taxation authority                            |
| VDER Cost Recovery | 2017+         | VDER solar reform, compensating distributed generation  |

---

## How Riders Appear in the JSON

Riders have a two-part structure:

**1. Rider Reference (in main tariff)**

```json
{
  "tariffRateId": 20389577,
  "riderId": 3399165,  // ← Links to rider tariff
  "rateGroupName": "CBC Rider",
  "rateName": "CBC Rider",
  "chargeType": null,  // ← No charge info here
  "rateBands": []      // ← Empty, details in rider
}
```

**2. Rider Implementation (detailed rate)**

```json
{
  "tariffRateId": 20443074,
  "riderTariffId": 3495063,  // ← This IS the rider tariff
  "rateGroupName": "Customer Benefit Contribution",
  "rateName": "Customer Benefit Contribution",
  "chargeType": "QUANTITY",
  "quantityKey": "systemSize",
  "rateBands": [{
    "rateAmount": 1.84,
    "rateUnit": "COST_PER_UNIT"
  }]
}
```

When processing the JSON, look for both:

- Rates with `riderId` (reference to rider)
- Rates with `riderTariffId` (implementation details)

---

## Quick Reference: Rider Calculation Methods

| Rider              | Charge Type       | Basis                 | Rate Structure    |
| ------------------ | ----------------- | --------------------- | ----------------- |
| Tax Sur-Credit     | CONSUMPTION_BASED | Per kWh               | Variable (lookup) |
| DLM Surcharge      | CONSUMPTION_BASED | Per kWh               | Variable (lookup) |
| CBC                | QUANTITY          | Per kW of solar       | Fixed ($1.84/kW)  |
| EV Make Ready      | CONSUMPTION_BASED | Per kWh               | Fixed ($0.0008)   |
| Arrears Management | CONSUMPTION_BASED | Per kWh               | Fixed ($0.0012)   |
| GRT Distribution   | QUANTITY          | % of delivery charges | Fixed by zone     |
| GRT Supply         | QUANTITY          | % of supply charges   | Fixed by zone     |
| VDER Cost Recovery | CONSUMPTION_BASED | Per kWh               | Fixed ($0.0011)   |
