National Grid gas-delivery rates would jump 22 percent, or $15.68 a month for average residential customers, under a rate-increase filing by the London-based company Friday.
The company said total bills could see a slightly smaller increase, 16 percent, or $13.40, if natural gas prices remain low, as projected.
The increase, proposed in filings with the state Public Service Commission, would bring the company’s Long Island operations an additional $142 million in annual revenue. The extra money would help fund infrastructure improvements, including new gas lines, additional employees and storm-hardening initiatives, the company said. National Grid has 570,000 customers on Long Island.
“In short, we have reached the limits of our current rate structure,” National Grid said in a statement. The increase would lead to a safer, more reliable system, spokeswoman Wendy Ladd said.
If the rate increase is approved, the company plans to hire 110 more field workers on Long Island to help remove and replace old steel gas pipes with stronger, more flexible polyethylene lines, Ladd said. Around 110 miles of gas pipe would be replaced each year, she said. The company also plans 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 company’s 1.2 million New York City customers also would see an average $13.98 monthly increase under a related rate-hike proposal.
National Grid, which formerly operated Long Island’s electric grid but lost that contract to PSEG Long Island in 2014, acquired the natural gas distribution system when it bought KeySpan in 2007. The company hasn’t had a delivery charge increase since 2005-06, Ladd said. National Grid still owns more than a dozen large and small Long Island power plants under contract to LIPA.
AARP state director Beth Finkel said the group opposed the increase, because “Long Islanders can ill afford a double-digit increase in their natural gas bills.”
National Grid has been under pressure to improve service and customer satisfaction.
Last year, the PSC ordered it to pay an $8.9 million fine for unacceptable customer satisfaction and complaint levels in 2014. Ladd said the company has since raised its performance. In 2013, the state attorney general settled a probe against the company after a computer system conversion led to months of delayed and incorrect payrolls. In 2012, National Grid was fined $1.6 million after a state investigation found employees had given 200 improper gifts to PSC staff regulating the utility.
Last year, Newsday reported that thousands of customers were overbilled by National Grid, in some cases by tens of thousands of dollars, as a result of a software computer glitch. Ladd said the problem has been resolved.
The company has installed automated meters in more than 550,000 customer homes and businesses, largely eliminating estimated billing, Ladd said.
The rate-hike proceedings are expected to take 11 months.
National Grid said it would prefer to phase in the increases over a period of years, starting in 2017. A final ruling on the rate plan from the PSC is expected by year’s end.