The state Department of Public Service will hold hearings on Long Island starting Tuesday to take public comments on National Grid’s request for $146 million in new gas-delivery revenues, a total 24 percent increase, starting next year.
The rate request, if granted by the state Public Service Commission, could hike the delivery portion of the residential natural gas bill by about $16 a month, starting next year, although National Grid has yet to calculate exact bill impacts. The figure, representing a 16 percent total bill increase for average customers when other changes to bills are considered, would vary by usage and customer classification.
In addition to the $146 million in new delivery revenue, National Grid is seeking $33 million in surcharges for investigation and remediation costs for toxic and other sites across Long Island, for a total $179 million in new revenue annually.
Money in the rate hike would fund National Grid’s effort to hire 110 more field workers on Long Island to help replace about 110 miles per year of old steel gas pipes with stronger, more flexible polyethylene lines, the company has said.
National Grid last raised delivery rates in 2006. London-based National Grid took on the system when it bought KeySpan in 2007.
National Grid said it also plans to use the increase to build a new customer outreach center in Brentwood, expand gas service to Mastic Beach, among other communities, and increase a monthly discount for low-income customers.
The first of the hearings is on Tuesday at 6:30 p.m. at the Nassau County Legislative Chambers, 1550 Franklin Ave. in Mineola, followed by a hearing Wednesday at 1 p.m. at the Riverhead Legislative Auditorium, 300 Center Dr. in Riverhead, and another Wednesday at 6:30 p.m. at the William H. Rogers Legislative Auditorium, 725 Veterans Memorial Hwy. in Hauppauge.
Some ratepayers plan to oppose the rate request.
“We think the increase is too high,” said Bill Ferris, a state lobbyist for AARP, whose members have filed more than 700 letters of opposition to the increase and will attend the hearings. “A double-digit increase is unacceptable. The PSC needs to push back on National Grid” to lower its rate request.
In filings, Ken Daly, president and chief executive of National Grid NY, acknowledged the requested increases are “sizable” but necessary because there’s a “large discrepancy” between what the state allows the company to collect from customers to pay its bills and the increasing expenses it faces. The company faces further credit downgrades if it can’t make up revenue needs, it claimed.
National Grid’s Long Island operation serves 567,000 customers in Nassau, Suffolk and the Rockaways.
In May, the state requested National Grid cut $58.7 million from its original $174.7 million rate increase. Evidentiary hearings on the case, during which the state will cross-examine National Grid officials and staff, are scheduled to take effect Sept. 6.
Hundreds of National Grid’s 570,000 Long Island customers have filed letters expressing opposition to the increase. AARP, representing hundreds of thousands of seniors on fixed incomes, say the “sizable increased” would “negatively impact a large number” of its members.
“This rate increase is too high and will threaten the affordability of essential natural gas service for vulnerable customers,” AARP said in a public comment letter filed in the case.
An AARP analysis found the proposal would increase the minimum monthly charge for residential non-heating customers, allow National Grid to “adopt new surcharges to allow rates to be increased without a rate-case filing and review of all the utility’s costs and revenues,” while giving itself “incentives to earn higher profits when certain performance targets are met,” and “significantly increase low-income customer bills.”
National Grid’s Long Island operations missed two key service standards in 2014, for complaint levels and customer satisfaction. It also missed the customer satisfaction metric in 2013, and paid $8.9 million in fines.
In addition to infrastructure improvements, the rate case filed by National Grid also asks the state to discontinue triple and quadruple penalties for missing multiple years of service requirements; end a billing amnesty program and customer finance education; and allow it to recoup the $16 million tab to upgrade its large liquid natural gas facility in Holtsville.