ALBANY — National Grid has agreed to a slightly smaller rate increase than it was seeking and will spread it out over the next three years, instead of imposing it all at once.
The state Public Service Commission announced Thursday that it, National Grid and 17 interested parties agreed to the three-year schedule of rate hikes, to begin next month.
The agreement also lowers bills for 220,000 low-income customers, continues the push toward energy efficiency and renewable energy and includes gas line safety upgrades.
Under the agreement, the electric bill for the typical residential customer using 600 kilowatt hours a month will increase 2.8, 3.8 and 3.9 percent in 2018, 2019 and 2020, respectively, or $2.22, $3.03 and $3.25. The gas bill for the typical residential customer using 77 therms a month will increase 1.7, 4.5 and 4.4 percent in those three years, respectively, or $1.20, $3.10 and $3.18.
The agreement announced Thursday totals 10.5 percent for electricity and 11.5 percent for gas over three years.
The rate hike initially requested in April 2017 by National Grid would have boosted total electric bills by 13.9 percent per month and total gas bills by 14.9 percent. It sought the entire increase all at once, as per state regulations, but indicated it would be willing to break it up into multiple rate increases.
In July 2017, it reduced the request to 11 percent for electricity and 12.5 percent for gas, saying some of its calculated future costs had decreased.
Total bills are a moving target that are outside National Grid’s control: The utility does not set the cost of gas or electricity (nor profit from their sale). Total bill projections issued Thursday assume the cost of gas and electricity will follow three-year cost projections calculated by the gas and electricity supply industries. The company delivers electricity and gas. It does not generate electricity or have its own gas supply.
National Grid said in a news release that the rate hike would give it the money it needs to maintain its service standards and upgrade its electrical and gas lines. It has noted that, when adjusted for inflation, its gas delivery prices are the same as in 2007, and electricity delivery prices are lower than 2004.
“After more than a decade of bill stability, we are pleased that our discussions with parties representing our customers and other key stakeholders have resulted in an agreement that will phase in delivery price increases,” said Ken Daly, National Grid’s New York President. “This plan allows us to invest $2.5 billion over the next three years in our energy infrastructure, while reducing the short-term impact on bills and providing customers a level of delivery price assurance.”
Other assessments of the deal were not as positive.
“A double-digit rate increase is simply too much for the overburdened New York consumers who rely on National Grid for their energy," AARP New York State Director Beth Finkel said in a prepared statement.
She said the rate hike could have been worse, though, and found some positives, including the inclusion of assistance for poorer New Yorkers.
Another thumbs-down came from Assemblyman Angelo Santabarbara, D-Rotterdam, who posted one of the first critical comments about the rate request on the PSC website 11 months ago.
“With the extremely cold and even record-breaking temperatures we have seen this year, this decision from the Public Service Commission is very disappointing and one that will negatively impact families and businesses across upstate New York,” he said in a news release. “With National Grid set to receive about $76 million in savings under the new federal tax law, which reduces the corporate tax rate from 35 percent to 21 percent, increasing rates is simply unacceptable.
He continued: “To say I’m disappointed in this decision from the Public Service Commission is an understatement. I have strongly opposed National Grid’s rate hike proposal from the start and will continue to take action to oppose this decision.”
Sen. Jim Tedisco, R-Glenville, told The Daily Gazette via email: “Thank goodness they didn’t get what they originally asked for, which was a delivery charge rate increase of 17.5 percent for electricity and 20.5 percent for gas. It would have been more criminal for a company with a $4.5 billion profit last year to try and further gouge ratepayers, which is why they should get an absolutely zero rate increase! This is why the Legislature needs to pass my legislation, the ‘Ratepayer Protection Act’ to ensure our elected representatives, not faceless bureaucrats, have the final say with any utility rate change.”
Other provisions of the agreement announced Thursday include:
- A policy that seeks to limit energy costs to no more than 6 percent of household income for the approximately 2.3 million low-income households in New York. Beginning next winter, National Grid is expected to have 160,000 low-income electric customers and 60,000 low-income gas customers. This program will result in substantial bill reductions (as much as 55 percent) for most low-income households.
- A service quality assurance program that brings customer-service metrics inline with other investor-owned utilities in New York.
- Refinements to the company’s collections practices, including electronic deferred payment agreements, written confirmation of other payment agreements, and enhanced messaging to ensure that customers know their options if they are behind on their utility bills.
- Provisions that will facilitate the upgrading of street lights throughout National Grid’s upstate service territory to energy-efficient LEDs.
- Raising targets for the company’s energy-efficiency program by 40 percent while increasing program funding by only 20 percent, reflecting the cost-effective nature of National Grid’s energy-efficiency programs.
- Updated performance measures for gas safety, including for leak-prone pipe removal, leak management, damage prevention, emergency response and gas safety regulations performance. The company will invest about $138 million to replace 150 miles of leak-prone gas pipe over the term of the rate plan.
- Add 245 new jobs over three years.
Parties that signed the joint proposal include Department of Public Service staff, PACE Energy & Climate Center, Environmental Defense Fund, NY-Geothermal Energy Organization, Tesla, ChargePoint, Great Eastern Energy, Mirabito Natural Gas, Blue Rock Energy, Direct Energy, the state Office of General Services, Wal-Mart East/Sam’s East, New York Power Authority, IBEW Local 97, and the cities of Albany, Buffalo and Syracuse.