National Grid presents final proposal for rate hikes

By: Marcus Wolf |

National Grid has presented its final proposal for raising upstate users’ monthly electricity and gas bills, which now calls for the increase to be spread over three years.

The company filed its first plan for rate hikes in April to the state Public Service Commission when it asked to immediately raise prices for all users. This included a more than $10 average monthly increase for residential users and $30 to $75 more per month for commercial users.

After months of stakeholder meetings, National Grid on Jan. 19 filed its final draft plan which, if approved by the commission, would allow it to increase rates over a three-year period, according to an investors report.

For example, the average residential user would see a $2.22 monthly increase on an electric bill for the first year, then an additional hike of $3.03 in the second year and another $3.25 in the third year, according to the proposal. That means the overall monthly increase for the three-year period would be $8.50.

Commercial and industrial gas users can expect a slight decrease in billing for the first year, but would receive increased charges in the second and third years.

“The joint proposal, which reflects the new federal tax cuts, calls for typical residential electricity bills to increase by about 3 percent in year one, and by 4 percent a year in the plan’s second and third year,” said National Grid spokeswoman Virginia J. Limmiatis in an email. “Typical residential gas bills would increase by less than 2 percent in year one, and about 4.5 percent a year in years two and three.”

The most recent planned hikes at the end of year three were lowered slightly from what the utility submitted in a revised rate plan in July.

The utility previously wanted to increase the average monthly residential gas bill by $8.70, which was reduced from the original $10.38 hike in the April proposal. The company’s most recent filing, however, calls for an overall monthly increase of $7.48 by the end of the three-year period.

Ms. Limmiatis said the utility hopes to earn an additional $276.8 million over the next three years from the rate hikes, including $221.3 million from new electricity rates and $55.5 million from new gas rates.

“We are pleased to see a progressive new proposal submitted with broad stakeholder support that incorporates the PSC’s nation-leading affordability policy, lowering bills for low-income customers by as much as 55 percent,” said commission spokesman James Denn in an email.

In exchange for increasing customer rates, National Grid plans to invest in electric and gas system updates, add 280 jobs upstate and continue implementing its energy affordability and economic development programs.

National Grid, however, reduced its budget for system updates from $2.7 billion to $2.5 billion. Ms. Limmiatis said the utility scrapped its plan to implement two million new smart meters and altered certain spending measures. The reduced investment led to a lower rate hike request, she said.

“There was less of a need, I guess, for those” meters, she said. “We’re going to put this on hold and look for opportunities in the future.”

National Grid hopes the commission will approve its proposal this spring so it can implement the new rates by April or May.

“(If approved), the joint proposal will allow the company to continue to invest in upstate New York infrastructure while phasing in customer bill impacts, providing enhanced energy efficiency programs and bill management tools, and continuing its recently expanded support for our most vulnerable customers,” Ms. Limmiatis said.

Proposed Monthly Rate Hikes

Residential

Electric

  • Year one: $2.22
  • Year two: $3.03
  • Year three: $3.25
  • Overall: $8.50

Gas

  • Year one: $1.20
  • Year Two: $3.10
  • Year Three: $3.18
  • Overall: $7.48

Commercial

Electric

  • Year one: $13.01
  • Year two: $21.47
  • Year three: $22.73
  • Overall: $57.21

Gas

  • Year one: -$3.20
  • Year two: $8.29
  • Year three: $8.03
  • Overall: $13.12

Industrial

Electric

  • Year one: $221.23
  • Year two: $303.03
  • Year three: $292.93
  • Overall: $817.19

Gas:

  • Year one: -$13.67
  • Year two: $24.84
  • Year three: $24.02
  • Overall: $35.19
National Grid presents final proposal for rate hikes