National Grid’s natural gas customers will see rate hikes averaging about 5 percent in each of the next three years under a plan approved unanimously Thursday by the state Public Service Commission.
The rate hike, part of a joint settlement agreement reached with the state in September, would cost average residential and commercial customers on Long Island and in the Rockaway peninsula $6.29 per month beginning in January.
National Grid, facing increased expenses and the need to invest in aging gas networks, initially had sought to raise $180 million in new annual revenues. That would have cost the average customer about $16.50 a month.
The revised plan, approved Thursday by the four-member commission and negotiated in September by two PSC administrative law judges, allows National Grid to collect $112 million in new revenue in 2017; $19.6 million in 2018 and $26.9 million in 2019.
The average bill for Nassau and Suffolk customers would increase by 5.5 percent in 2017; 4.9 percent in 2018 and 5.2 percent in 2019.
New York City customers would see their monthly bill grow by an average $9.40 per month. The increased revenues will in part go to fund cleanup of several toxic Superfund sites, including the Gowanus Canal in Brooklyn and Newtown Creek between Brooklyn and Queens.
PSC chairwoman Audrey Zibelman called the agreement a “fair and necessary result.” Commissioner Gregg Sayre said the deal “strikes a fair and reasonable balance.”
Commissioner Diane Burman called the hike a “balancing act” that will “please some people while others won’t be.”
In a statement, National Grid said the PSC’s action “achieves a fair and reasonable outcome for our customers and stakeholders” by spreading the costs over three years.
The company said the hike would allow it to fund the removal and replacement of more than 400 miles of leak-prone gas pipes by the end of 2019.
The utility also said it would increase a monthly discount for low-income customers, hire 380 new workers on Long Island and in New York City, build a new customer outreach center in Brentwood, expand gas service to Mastic Beach and complete the cleanup of several toxic sites.
National Grid officials said the total annual bill for Long Island customers would average $1,406 next year, compared with $1,680 in 2007 when fuel prices were higher.
But Richard Berkley, executive director of the Public Utility Law Project, which represents residential low-income and rural consumers, said he was “disappointed” with the rate hike.
“Long Island’s and New York City’s consumers are already facing high costs from three of the continental United States’ most expensive energy utilities,” Berkley said. “When added to the large increases in natural gas rates today, the bill impacts are very harmful to consumers.”
Bill Ferris, the state’s legislative representative for AARP, said the hikes would hurt Long Island ratepayers. “We can do better,” he said.
National Grid, which took over the gas-delivery system when it bought KeySpan in 2007, serves 567,000 customers in Nassau, Suffolk and the Rockaways.