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National Grid proposes new rates

National Grid proposes new rates

Electricity and natural gas delivery rates could go up
National Grid proposes new rates
Chris Doyle, senior supervisor of operations for National Grid, at the Rivers Casino construction site in August 2016.
Photographer: Marc Schultz

CAPITAL REGION -- National Grid is proposing an increase in electricity and natural gas delivery rates, which would take effect as of April 1, 2018.

The utility said in a prepared statement issued Friday that the rate increase, which is subject to approval by the Public Service Commission, would mean a monthly increase of $11.23 per month for a typical residential electricity customer and $10.38 per month for typical residential natural gas customers, increases of 21.8 percent and 13.9 percent, respectively.

Those numbers are based on an electricity customer who uses 600 killowatt-hours per month (the average in New York State is 601, according to the Energy Information Administration) and a natural gas customer who uses 77 therms per month, according to National Grid.

The utility pointed out its customers have gone more than a decade with stable energy bills -- when adjusting for inflation -- even as the company spent $6 billion over that time on infrastructure improvements. Electricity delivery rates are lower now than they were in 2004, the company said.

"The new delivery prices will allow the company to modernize its electricity and gas networks to further enhance reliability and resiliency, improve customer service – including programs to assist the most vulnerable customers – and promote economic growth," the utility said in its prepared statement.

A delivery price freeze for National Grid’s upstate electricity and natural gas customers will remain in effect through March 31, 2018.

While regulations require the company to file a one-year plan, National Grid is open to phasing in new rates through a multi-year agreement to mitigate customer impact, the utility said. Spreading the increase over three years, for example, could reduce the first year customer bill impacts by more than half. 

The increase would have no impact on energy supply prices, which are set by the market.

“After more than a decade of rate stability, we fully understand the near-term bill impact of this proposal on our customers and will look to phase in that impact while providing enhanced energy efficiency programs and bill management tools, and significantly increasing our support for our most vulnerable low-income customers,” said Ken Daly, National Grid’s New York president, in a prepared statement. “The proposal is focused on efficiently delivering the investments needed for the long term to achieve our primary objective: the safe and reliable delivery of energy for our customers.

"This includes preparing for and responding to severe storms, which are increasing in both frequency and intensity. It also will allow us to lay the foundation for a sustainable and clean energy future by developing networks capable of serving the next generation of customers.”

The plan did draw at least one critic on Friday.

“The proposal made today by National Grid to hike its electricity and natural gas rates by a whopping 14 percent is outrageous and too much of a burden on New York State’s residents and small businesses," said State Sen. Jim Tedisco, R-Glenville, in a prepared statement. "New Yorkers already pay the 7th highest energy costs in the nation, and this rate hike only will make things worse.
 
“The Public Service Commission should show some backbone here and short circuit National Grid’s attempt to gouge taxpayers of their hard-earned money. Today, I’m drafting a letter to the PSC to turn up the heat on National Grid to reject this proposal and will be working with my colleagues in the Senate to stand up for ratepayers and pull the plug on this plan.”

For its part, the PSC said Friday the review process is designed to ensure utilities aren't out to gouge taxpayers with rate-change requests.

"Part of the rate case process is to ensure that it is not business-as-usual for utilities, and to obtain, consistent with REV, more capital efficiency and energy efficiency as part of utilities’ plans to modernize the grid and ensure reliability affordably," said PSC spokesman James Denn, in a prepared statement. "With that, the rate filing will be subject to a rigorous 11-month statutory review process.

"The purpose of the review will be to ensure National Grid’s rates remain just and reasonable. This detailed review will include a careful and close examination of the company’s proposal by Commission staff, as well as by other interested parties, including National Grid’s customers, and ample opportunities for public comment and public hearings. At the end of the review process, the PSC will have the final say in determining what the rates will actually be."

As part of its request, National Grid outlined how it would invest some of the increased revenue, should the rate increase be approved:

  • Approximately $2.7 billion would be spent over the next three years on electricity and gas networks across upstate New York. This includes investments that will allow the company to seamlessly connect distributed generation, especially renewable resources. These investments will begin transitioning the traditional utility model to a platform that accommodates a two-way flow of energy and enhances market dynamics.
  • Deployment of advanced metering infrastructure for both electricity and gas service that will provide customers enhanced energy consumption data and more products and services for managing their energy use. Over time, the investment would mean more than 2 million new "smart meters" being placed into service.
  • New demonstration projects, including initiatives to test smart home technologies and a distributed generation cost-recovery model.
  • Investments in the natural gas systems that will mitigate regional capacity constraints, expand availability of gas service and improve the safety and reliability of the distribution network. This includes the retirement of 150 miles of leak-prone pipe over three years.
  • Increased customer assistance and energy affordability programs for those having difficulty managing their energy costs, including a new initiative to increase enrollment in energy affordability, energy efficiency and gas safety programs by more than 50,000 customers. 
  • Continued deployment of economic development and energy efficiency programs that help grow the upstate economy.
  • Adding more than 280 jobs over the next three years to support electric and gas operations, grid modernization and customer programs. These will be local employees, the utility said.

National Grid’s electricity business serves 1.6 million customers in more than 450 cities and towns across 24,000 square miles. The gas distribution business serves more than 600,000 customers across portions of central, northern and eastern New York.
Under New York public service law, rate cases are an 11-month process that will include opportunities for public input.

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