National Grid electricity bills in the homes of New Yorkers will decrease an average of 6 percent in 2012 following a decision by the state’s Public Service Commission on Thursday.
“Not only were we able to freeze electric delivery rates for average residential customers in 2011, but residential customers will now see a sharp decrease in delivery rates next year,” commission Chairman Garry Brown said. “Furthermore, commercial and industrial customers will see unprecedented decreases in delivery rates, a welcome change that will have a positive economic impact across National Grid’s service territory.”
The total savings for large commercial and industrial customers will max out at about 23 percent, 14 percent for small commercial and industrial customers.
National Grid services 1.6 million upstate clients, which includes 1.5 million residences, that will see a drop in delivery costs worth a total of $429 million in 2012.
According to a release from the Public Service Commission, the primary reason for the decrease in pricing is the elimination of the fixed Competitive Transition Charge. Created in 1998 as part of Niagara Mohawk’s rate plan, the charge was initially extended in 2002 when the company merged with National Grid.
In January 2010, National Grid requested an extension of the charge past 2011, but the Public Service Commission rejected the request because they felt level rates could be offered without extending the charge.
Ken Daly, president of National Grid for New York, said in a press release, “We’re very pleased with the outcome of [Thursday’s] decision, as it allows us to pass along significant bill reductions for our upstate customers. This continues a trend of relative stability in delivery rates for customers that will now carry into 2013, and ideally beyond.”
It was also announced on Thursday that National Grid will be allowed to recover $236 million in outstanding deferral account balances, including $35 million in costs associated with Hurricane Irene, through a surcharge that will be imposed over a 15-month period that begins on Jan. 1 and ends March 31, 2013. There will be a longer window for street lighting customers.
These deferred expenses, which also include pensions, tax or regulatory changes and environmental costs, were incurred over the last 10 years. The deferred costs also cover a nearly $1.5 billion investment the company made over the last five years to upgrade electric transmission and distribution in upstate New York.
National Grid plans on submitting a proposal in the spring of 2012 for new rates that would begin in 2013 once the surcharge for deferred costs expires.
“National Grid’s commitment to our customers begins by providing reliable service, and includes working with our customers to manage their bills through our energy efficiency programs. Further, we will use this opportunity to be even more active in helping our communities to thrive through our economic development programs and partnerships,” Daly said. “We must to do more to invest in our aging networks for the benefit of our customers and the communities we serve, and we believe we can do so in an environment of rate stability for the next few years.”
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