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National Grid rate hike bid includes other requests

A National Grid worker puts in a gas

A National Grid worker puts in a gas line in Southold on Jan. 7, 2014. Credit: Randee Daddona

National Grid is asking for more than just a 22 percent increase in rates starting next year to bring in $140.3 million.

In thousands of pages of documents filed with the state Public Service Commission, National Grid makes its case for the 22 percent hike in the delivery charge, which documents indicate will increase average residential bills about $15.68 a month. The first public meeting on the filing, a technical conference for interested parties in the case, takes place in Albany on Monday.

In addition, the documents lay out a shopping list of National Grid’s requests, including:

  • An effort to end triple and quadruple penalties it faces for missing multiple years of service standards.
  • A plan to end a little-known billing amnesty and finance education program for customers with high arrears.
  • Plans to charge customers to upgrade a massive liquid natural gas facility in Holtsville, with a $16 million price tag.
  • Plans to reroute customer service calls in high-volume periods from a current facility in Brooklyn to National Grid and contractor facilities around the state.

Ken Daly, president and chief executive of National Grid NY, said in the documents that the requested increases are “sizable.” But, he said, they’re needed because there’s a “large discrepancy” between what the state allows the company to collect from customers to pay its bills and increasing expenses. National Grid’s Long Island operation serves 567,000 customers in Nassau, Suffolk and the Rockaways.

“After a decade of stable rates, we believe our proposals . . . are essential to further modernize our natural gas infrastructure . . . and improve customer service,” spokeswoman Wendy Ladd said.

One customer who has submitted comments to state regulators at the Department of Public Service disapproved.

“A 20 percent increase in the cost of delivery services is usurious, particularly when most of that is going to be used for investment to further fatten [National Grid’s] profit margin,” wrote JoAnna DeGennaro of Kings Park.

National Grid said in its documents that for customers, “the bill impacts the company is presenting are significant,” so it is proposing to phase them in over three years instead of one. Some classes of customers will see a higher percentage increase, some lower, Ladd said.

The company said failure to approve its rate increases “could put the company at risk of further credit downgrades to the detriment of customers.” The company noted a recent downgrade by Standard & Poor’s and Fitch, citing the company’s “pressing need for rate relief.”

But it’s not just more money to replace aging steel and cast-iron pipes that National Grid is seeking.

National Grid is proposing that the state drop provisions that triple or quadruple penalties for missing certain metrics, including after National Grid misses targets in any two of the prior four years. The company asserted it had demonstrated “good performance” since the merger of KeySpan and National Grid in 2007, when the PSC first proposed them. It also said failed metrics on Long Island were “largely due to factors beyond the company’s control.”

While National Grid is not asking the state to alter the current $9.9 million it can receive in penalties for missing the metrics, the company is proposing a reallocation of the metrics to include the new measures. Some of the newly proposed standards would rate the company on tasks that can’t be influenced by outside factors, such as the weather.

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. The company blamed superstorm Sandy for the problems, and a bungled transition to a new computer system. The company said it expects to meet 2015 service targets, despite complaints from thousands of customers last year who were overbilled.

National Grid wants to discontinue a program that provides amnesty and finance management for ratepayers with arrears over $400 because it “has not been successful.” In 2014, the company said, 27 percent of participants completed it while 67 percent defaulted. Ladd said the company proposes diverting funds from that program to other programs that “provide more benefits to customers.”

National Grid also is proposing to use more customer call representatives from outside its downstate calling area, drawing on workers from around the region. National Grid operates upstate in the former Niagara Mohawk territory. There are 90 workers responsible for the Long Island operation at the center, along with 150 working for New York City operations. Ladd said gas emergency calls would be kept within the service territory.

One project that will be covered by the rate increase is an upgrade of a liquid natural gas facility in Holtsville, according to the documents. The company plans to spend $16 million to upgrade that facility, which is more than 40 years old and requires “significant investment to ensure continued safe operation.”

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