National Grid’s natural gas customers would see rate increases starting in January under a joint settlement proposal reached with the state this month that will allow the company to hike bills around 5 percent for each of the next three years.
The new plan, which still requires a vote by the full Public Service Commission before taking effect in January, would mitigate the impact of the increase to around $6.24 a month for customers using around 1,000 therms of gas a year, National Grid said. Previously, National Grid had expected monthly increases of around $16.50 a month.
National Grid had initially sought to increase revenue by around $180 million a year, including $38 million in costs to review and clean up toxic sites. Under the joint proposal, National Grid would be allowed to collect $112 million a year in new revenue starting in 2017, another $19.6 million in 2018 and another $26.9 million in 2019. To help keep the increases steady, the company level the increases to between $62 million and $79 million over the three years.
The plan would hike average bills 5.5 percent in January 2017, 4.9 percent in 2018 and 5.2 percent in 2019. The delivery rate portion of bills would increase 9.3 percent, 7.3 percent and 7.6 percent, respectively.
Consumer and industry groups objected to the plan. The Public Utility Law Project, a low-income utility watchdog group, noted that by year three, customers would be footing a roughly 40 percent increase in rates. And it argued that National Grid shareholders should bear a larger percentage of investigation and remediation costs for Grid toxic sites and that the joint proposal was “completely unbalanced in favor of the companies’ interests.” The DPS said PULP’s assertions “lack merit.”
The rate proposal would provide funding for National Grid to remove and replace 405 miles of leak-prone gas pipe over the three years, and provide a discount for low-income customers of $8.81, and $41 a month for non-heating and heating customers.
In a statement, National Grid said it “strongly supports” the joint proposal.
“We believe this mutually agreed upon proposed settlement achieves a fair and reasonable outcome for our customers and stakeholders,” the company said, adding it “provides customers with safer and more reliable gas service, enhances storm resiliency, expands the availability of gas service, helps reduce methane emissions, better supports our low-income customers and local communities, and allows the company to make the investments needed to continue to modernize our gas infrastructure.”
The proposal would allow the company to create a new gas-safety and reliability surcharge to pay for costs to upgrade leaky gas pipes beyond those covered by the three-year rate increase. The plan also would allow National Grid to reconcile costs annually for site investigation and remediation of toxic cleanups.