National Grid on Monday reduced the rate increases it is seeking for delivering gas and electricity to customers across upstate New York.
The utility on April 28 submitted a request to state regulators to increase its delivery charges by 21.8 percent for electricity and 24.8 percent for natural gas, effective April. 1, 2018. On Monday, it revised the request to 17.5 percent for electricity and 20.5 percent for gas.
The company made the change to reflect the latest projections of pension and other post-employment costs for its employees. Company spokesman Steve Brady said such changes, called a "corrections and update filing," are a common part of the rate hike process, but they don’t usually entail this large a change.
“What makes this one somewhat unique is the size of it,” he said.
Brady said an update to an actuarial forecast of future expenses led to the rate request change. He explained there was no point in delaying submission of the rate hike request to wait for the new projection of expenses, nor in moving the actuarial projection forward so it was in hand while drawing up the rate request, because the numbers are continually changing.
“We make the best judgment we can,” Brady said. “The challenge is that if you wait for accurate data, you’re going to wait forever.”
The cost of delivery of electricity and gas is regulated by the state Public Service Commission. The cost of the electricity and gas itself is not regulated. It is set by the market, and National Grid derives no profit from it.
The commission is continuing its review of the rate hike request.
Consumer advocates have decried the rate request as too steep, and as of Monday, 91 public comments had been submitted to the PSC electronically, most of them opposed to the increase.
National Grid said it needs the additional money to help fund $2.7 billion in upgrades to its equipment and infrastructure; to continue economic development efforts; to maintain energy-efficiency programs; to improve customer service and system reliability; to assist needy customers; and to integrate new technology. The utility noted that, adjusted for inflation, the delivery price for electricity is lower today than in 2004, and the delivery price for gas is the same as in 2004.
The rate hike review process typically takes 11 months. Brady on Monday said there was no indication as of this week about whether the process is going in the company’s favor. National Grid began receiving requests for more information from the regulators almost immediately upon filing its request, but that is typical -- a utility may get hundreds or even thousands of such questions during the process, he said.
On Aug. 25, testimony and exhibits are due to be submitted by the PSC staff, which should provide some insight to the review process, he added.
Replies to the testimony and exhibits are due by Sept. 15.
The rate request specifies that the increase would take effect all at once. But National Grid is willing to phase it in over a three-year period to ease the impact on ratepayers.
“We are still very much interested in a multiyear agreement,” Brady said.
National Grid said Monday that, under the revised rate hike request, a residential customer using 600 kilowatt hours per month would pay $8.93 more per month for electricity delivery, and a residential customer using 77 therms would pay $8.70 more per month for gas delivery.
Under the original rate hike request, those increases would have been $11.23 per month for electricity and $10.38 for gas.