The state Department of Public Service wants National Grid to cut $58.7 million from the proposed $174.7 million rate increase it requested for natural gas for its Long Island customers next year, according to a filing on Friday.
Most of the requested cuts would reduce National Grid’s profit levels. The recommended reduction would leave National Grid’s Long Island subsidiary with about $116 million base-rate increase for its 570,000 Long Island customers starting in 2017.
National Grid’s original filing sought a $141 million rate hike, but that number took into account a shifting around of other customer charges and lower natural gas costs. In all, National Grid had said, average residential customers would see a $13.40 monthly increase, a 16 percent rise, under its originally proposed increase. The last rate increase was in 2007.
Officials weren’t available to describe how the state’s proposed reduction would impact bills, but in a statement DPS spokesman James Denn said the agency is “fighting for ratepayers.”
Denn noted the Public Service Commission can “reject, accept or modify” the recommendations.
DPS is recommending that National Grid adjust its requested profitability level under the new rates to 8.6 percent from a requested 9.4 percent. That cuts the requested increase by $24.7 million for the company’s Long Island division. Other proposed challenges to National Grid’s request would cut the rate hike by another $34 million.
National Grid said it would review the rulings and respond by June 10. It described the DPS filing as part of the agency’s “normal rate case process,” one that ultimately will result in a final ruling by the Public Service Commission by year’s end.
“Still,” said spokeswoman Wendy Ladd in a statement, “we feel our proposals and the costs associated with them are essential to provide customers with a safe and reliable gas service,” among other things.
National Grid has proposed replacing and installing improved new gas lines, hiring 110 new Long Island employees and implementing new storm-hardening initiatives. “In short, we have reached the limits of our current rate structure,” National Grid has said.
In its filing, the DPS recommended that the company institute new measures that encourage the company to increase efficiencies that can benefit its shareholders and customers.