By: Alex Kuffner |
National Grid, the dominant utility in Rhode Island, is seeking increases in its distribution rates that would see residential electric bills rise by 6 percent and gas bills go up by 5 percent in late 2018.
The proposal filed Monday afternoon with the state Public Utilities Commission represents the first hike in base distribution rates in five years by the company that supplies electricity to 492,000 customers in Rhode Island and gas to 267,000 customers.
The new rates would raise an additional $71.6 million annually for National Grid and reflect increases in its operating costs, including health care, labor and equipment, as well as investments in cybersecurity, company executives said.
“We know that any rate increases are tough for customers, but we’ve really worked hard to manage costs over the past five or six years,” said Tim Horan, president of National Grid in Rhode Island.
But the proposal was met with disbelief by the Raimondo administration.
“Rhode Island families and small business owners — especially manufacturing businesses — are already challenged by high energy costs,” Gov. Gina Raimondo said in a statement. “The Public Utilities Commission needs to open up National Grid’s books and stand up for Rhode Island ratepayers.”
Macky McCleary, administrator of the state Division of Public Utilities and Carriers — sister agency to the PUC — said Rhode Islanders deserve better value in their utility services.
“What we received today appears to be a proposal that continues business as usual and presumes the willingness of Rhode Islanders to bear an ever‐increasing burden of higher costs,” he said.
Under the proposal, the utility would create 39 new jobs in its electric business, largely to help connect solar, wind and other new sources of energy spread around the state to the regional power grid and 38 new positions on the gas side to inspect pipelines and improve safety to comply with more stringent federal regulations. The rate proposal also reflects a new flat 15-percent bill discount for low-income customers.
The filing includes a separate request for an additional $3.6 million that would fund parts of a state plan to modernize the power sector. Those programs range from building electric vehicle charging stations to a demonstration electric heat pumps.
But at the heart of the rate case are core business costs, which National Grid has seen go up since the last case of this kind in 2012, Horan said in a conference call with reporters on Monday.
Typically, National Grid applies for new distribution rates every three years, but there is no set schedule for such filings, which are submitted at the behest of the utility.
“Resetting the rates will allow us to continue to improve service quality,” Horan said.
The new rates do not reflect any changes in the commodity prices of electricity or natural gas. Those prices are adjusted through separate dockets with the Public Utilities Commission. A proposal took effect in October that substantially raised the energy portion of electric bills. A request to slightly raise the energy portion of gas bills is currently pending before the commission.
The proposal released on Monday affects only the portions of gas and electric bills that pay for delivery. It’s under those costs that National Grid derives its profits.
The PUC review is set to take nine months, with the new rates taking effect in September.
When National Grid files rate proposals in response to changes in energy costs, the PUC has little room to make changes because larger trends in commodities markets are at play. But proposals for distribution rates offer more room for revision.
In 2012, the company asked for $51.4 million, but the commission approved less than two-thirds of that amount.