National Grid lowers its price increase request
National Grid has reduced its request for new April 2018 electricity and natural gas delivery prices by approximately $76 million in a filing made Monday with state regulators. The changes are largely the result of updated forecasts for costs and interest rates that were included in the company’s April 28 filing. Today’s filing is a standard part of the rate case process. If approved as amended, the proposal would result in total monthly bill impacts of $8.93 or 11 percent (17.5 percent on delivery) for a residential electricity customer using 600 kilowatt-hours. Total monthly bill impacts for residential gas customers would be $8.70, or 12.5 percent (20.5 percent on delivery), based on 77 therms used. The chart below compares bill impacts of National Grid’s April 28 filing and today’s update. While regulations require the company to file a one-year plan, National Grid is hoping to phase in new rates through a multi-year agreement to mitigate customer impact. Spreading the increase over three years, for example, could reduce total bill impacts to less than 5 percent annually. The company’s filing would impact only energy delivery prices. Supply prices are set by the market, not National Grid. The adjusted average residential monthly bill impacts are as follows (all numbers based on total bill):
- Original April 28 filing for electricity service (600 kwh) was $11.23, a 13.9% increase.
- Revised July 10 filing for electricity service (600 kwh) is now $8.93, an 11% increase.
- Original April 28 filing for gas service (77 therms) was $10.38, a 14.9% increase.
- Revised July 10 filing for gas service (77 therms) is now $8.70, a 12.5% increase.
The most significant change in Monday’s filing results from updated calculations of future pension and other post-retirement benefit costs. New studies have pegged these costs to be less than originally estimated in April. The company’s rate request is under review by the New York Public Service Commission and, if approved, would take effect on April 1, 2018. The current delivery price freeze for National Grid’s upstate electricity and natural gas customers remains in effect through March 31, 2018. National Grid’s upstate New York customers have experienced more than a decade of stable energy bills. Adjusted for inflation, natural gas delivery prices have held steady and electricity delivery prices are lower than they were in 2004. Over that same period, the company has invested more than $6 billion in upgrading and expanding its delivery infrastructure. New delivery prices will allow the company to modernize electricity and gas networks to further enhance reliability and resiliency, improve customer service – including programs to assist the most vulnerable customers – promote economic growth, and integrate new technologies that support the demands of a modern energy system. The company has proposed a $2.7 billion investment in its systems over the next three years, including programs specifically designed to address and respond to the increasing frequency and severity of storms that can affect customer service. The company’s revised rate proposal continues to call for 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. Likewise, the proposal continues to support deployment of economic development and energy efficiency programs that help grow the upstate economy.
