Albany

National Grid seeks 4% to 6% rate hikes, proposes $50M in COVID relief

Utility and its customers both facing financial pressure amid pandemic
A National Grid truck in Schenectady in 2017
PHOTOGRAPHER:
A National Grid truck in Schenectady in 2017

Categories: Business, Fulton Montgomery Schoharie, News, Saratoga County, Schenectady County

ALBANY — National Grid customers in upstate New York would see rate increases of 4 percent for electric service and 6 percent for gas service in July 2021 under a proposal the utility submitted Friday.

The announcement came a day before National Grid implemented its 2020 rate hikes, on Aug. 1. Those increases originally were scheduled to take effect April 1 but were pushed back to July 1 because of the COVID-19 crisis, then pushed back a second time to Aug. 1.

Also because of the pandemic, National Grid and other major utilities providing water gas and electricity service agreed in mid-March to not cut off service to any residential customer facing financial hardships due to COVID-19.

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In the same vein, National Grid announced Friday that it is proposing to provide up to $50 million in relief to the most economically vulnerable residential customers and businesses that are struggling due to the pandemic.

Both the COVID-19 relief payment and the rate hike will go before the state Public Service Commission for review.

The rate hike proposal would affect the charges customers pay for delivery of electricity and natural gas through the infrastructure National Grid maintains across upstate New York. The costs of the gas and electricity themselves are determined by the market; the company doesn’t set the price or profit from its sale.

National Grid said the average impact of its proposed increase on residential customers would be $3.43 per month for electricity and $4.53 per month for gas.

National Grid’s current three-year rate agreement expires March 31, 2021. The proposal is for a one-year plan but the company hopes to instead reach agreement on another three-year plan.

The utility said the 4 percent and 6 percent rate hikes would yield a total of $142 million, money that would help it make needed upgrades, prepare for and recover from the more frequent and more severe storms hitting the region, and integrate clean power sources into the power grid.

Also funded by the rate hike would be enhanced energy affordability programs, continuation of economic development programs and new investment in energy-efficiency and demand-response programs to help customers manage energy usage and bills.

Friday’s filing triggers an 11-month review, during which the PSC will seek comment and criticism/support of the proposal from interested parties and the general public, then review the proposals to ensure they are fair and reasonable.

Through this process, PSC says its “number one priority is ensuring that all New Yorkers have access to safe, affordable, reliable and clean energy services.”

In upstate New York, National Grid supplies electricity to 1.6 million residences and businesses across 24,000 square miles and gas to more than 600,000 customers in a smaller area.

National Grid said Monday there are no details yet of how its proposed COVID-19 relief would be allocated among those who need it most, because that will be one of the points of discussion with the PSC, with input from customer advocates and other interested parties.

The up to $50 million needed to fund this relief measure would come from deferral account credits.

John Bruckner, National Grid’s New York president, said in a news release that COVID-19 has influenced the proposal for relief as well as the rate hike it is seeking.

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(The two plans are being submitted separately in hopes of moving the relief proposal along more quickly than the 11 months a rate hike review typically takes.)

“We know we are not operating in a business-as-usual climate,” Bruckner said. “We will do everything we can to work with PSC staff and other stakeholders to reach a multi-year settlement that maintains affordability, mitigates bill impacts and supports New York’s economic recovery. At the same time, we need to adjust rates to cover the costs of providing service and we must remain financially healthy to attract the necessary capital to finance our operations, which will lower costs for customers in the long run.” 

Meanwhile, the PSC in June began a proceeding to determine the impacts of COVID-19 on the entities it regulates as well as on the customers they serve.

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