The New York State Public Service Commission on Tuesday dismissed a request that New York State Electric & Gas Corporation and Rochester Gas and Electric Corporation be allowed to raise their rates.

NYSEG and RG&E had been prohibited from filing for rate relief under the terms of their recent acquisition by Iberdrola, S.A., unless they could demonstrate that their ability to provide safe and reliable service would be jeopardized. The commission found no such jeopardy exists.

In a statement released Tuesday, Public Service Commission Chairman Garry Brown said that the determination was made because the companies agreed to not file for a rate increase within a certain time period unless they could show financial performance would fall to levels that would jeopardize the ability to provide safe and reliable service and that they failed to show that was the case.

NYSEG and RG&E expressed disappointment with the decision and said they still face serious financial challenges that will cause their financial condition to fall to levels that would jeopardize their ability to provide safe and reliable service.

"In the absence of a full review by the Commissioners of our financial condition and rates, the Companies' credit ratings may be reduced, which will increase the Companies' borrowing costs and further exacerbate our financial condition in this time of global financial turmoil," said James P. Laurito, president and chief executive officer of NYSEG and RG&E, in a news release. "The result will not be beneficial to our customers or the state of New York."