National Grid's Long Island natural gas customers will share $11.4 million in credits following the settlement of a state probe into how the company spread out costs among its subsidiaries.
The settlement announced Thursday by the state Public Service Commission will see a total of $24.75 million credited back to National Grid customers of the company's KeySpan East and Brooklyn Union Gas subsidiaries.
National Grid's 558,000 gas customers in Suffolk and Nassau counties and the Rockaways will share the $11.4 million.
The probe found that National Grid did not have adequate procedures and policies in place to properly allocate costs of its central service units to operating subsidiaries that used the services. As a result, Long Island and New York City gas customers were improperly overcharged for those costs.
The PSC probe began as a result of findings from a rate review of National Grid's upstate electric division, formerly Niagara Mohawk.
The PSC is still working on a plan to disburse the credits to affected customers, a spokesman said.
The probe, begun in 2010, focused on National Grid service companies that provide a range of support functions to its regional gas and electric operating affiliates, including human resources, finance and management services. The PSC audit found National Grid "did not have very good internal controls and accounting procedures to ensure that costs charged by the service companies were being allocated properly."
National Grid, in a letter accompanying audit recommendations, said it "remains committed to increasing the transparency of its service companies" while implementing a list of PSC recommendations.
"National Grid takes very seriously our responsibility to accurately account for costs," spokeswoman Wendy Ladd said. "We have worked with the parties in this settlement to reach a resolution that benefits our customers and resolves all outstanding issues."