National Grid rate hikes delayed
March 2022 is new target date as company, regulators continue settlement talks
National Grid and state regulators have decided to delay any new increase to gas and electric rates until March 2022 as the two sides continue to hold settlement talks over the utility’s proposed increase of $142 million.
National Grid, which filed the proposed rate plan last summer, had originally hoped that the new rates would take effect July 1 since the state Public Service Commission, which regulates utilities, typically takes about 11 months to review rate increases.
Under National Grid’s rate hike plan, the average residential electric bill would increase $3.43 per month, or about 4 percent, and the average residential gas bill would increase $4.53 per month, or about 6 percent.
That would be the scenario if National
Grid’s $142 million rate increase were to take effect all at once. The utility and the PSC could decide to spread the increases out over several years during the settlement talks. The PSC could also force National Grid to reduce the amount of its rate hike request, something that consumer groups have been urging the PSC to do.
Last year, as the COVID -19 pandemic and government lockdown orders caused widespread unemployment and financial hardship for its customers, National Grid delayed implementing a previously approved rate hike for gas and electric service that was supposed to take effect in April 2020. The increase was ultimately delayed.
Several of the major bond rating services downgraded the ratings of National Grid’s British parent company and several of its subsidiaries earlier this year as the utility’s efforts to raise rates were slowed by the pandemic.
Moody’s, one of the rating services, specifically noted in a March report that the PSC “appears to have placed greater emphasis on affordability” during its most recent interactions with National Grid, which also provides gas service in the New York City area.
Moody’s also mentioned in that March report that “political rhetoric and actions taken towards various state utilities have increased” under Gov. Andrew M. Cuomo, although it is possible that could change when Lt. Gov. Kathy Hochul takes over for Cuomo, who is resigning next week amid his sexual harassment scandal.
Even though National Grid’s next rate increases, if approved by the PSC, won’t take place until next March, the utility would be able to recoup that lost revenue in any settlement with the PSC.
In a filing with the PSC last week, National Grid said that it would push the proposed rate increases to March of 2022 “with the understanding ” that the PSC would include a provision in the rate plan that would ensure that the utility “is restored to the same financial position it would have been in had there been no extension and new rates went into effect on July 1, 2021.”