Local households will soon see an increase in their utility bills under a compromise agreement reached and approved Thursday by the state Public Service Commission.
The PSC reported that the price increases will be phased in over a three-year period. The first increase starts next month and will raise average electric bills 3 percent — approximately $2.22 per month — and increase gas bills 1.7 percent — approximately $1.20 per month. Those figures are based on households using 600 kilowatts of electricity per month and 77 therms of gas per month. Consumers can see their actual usage amounts on their National Grid bills.
In its announcement, the PSC said that it had dramatically lowered National Grid’s three-year rate increase request of $407 million by $351 million as well as secure lower bills for some 220,000 low-income customers and significantly improve energy efficiency, renewable energy, gas safety and infrastructure resiliency.
The PSC’s unanimous approval establishes three-year electric and gas rate plans that limit the overall revenue increases in the first year to the 1.7 percent hike for electric customers, and 2.4 percent for natural gas customers. National Grid had sought an increase of 13 percent in electric rates and 14 percent in natural gas rates, according to the PSC.
Under the second year of the new rate plan, customers will see their bills rise roughly $3.03 per month or 3.8 percent starting in April 2019, and $3.25 per month or 3.9 percent in the third year starting in April 2020, the PSC said. Gas bills will go up approximately $3.10 per month or 4.5 percent in the second year, and roughly $3.18 per month or 4.4 percent in the third year, the PSC reported.
When the full increases take effect in April 2020, an average residential customer will pay $102 per year more for electricity — about $8.50 per month — and $90 more for natural gas — about $7.50 a month.
Eligible low-income electric customers will see a bill reduction of up to 55 percent, the PSC added. For the lowest income customers, energy bills could be reduced by as much as $40 a month below current levels, the PSC and National Grid reported.
The decision allows National Grid to go up although commodity costs for electricity and gas are at historically low levels. The rates approved Thursday are in relation to National Grid’s delivery charges, which include personnel, maintenance and other operational costs. Commodity prices could increase depending on market conditions, officials said.
The approved plan permits the utility company to earn profits of up to 9 percent of its equity investment, the PSC announcement said, adding that any profits above that threshold must be shared with customers.
“We are pleased to adopt a progressive rate plan that is much improved over what the company initially proposed,” said Commission Chair John B. Rhodes. “The plan — endorsed with broad stakeholder support by environmental groups, labor, large business customers, and the three largest cities in the company’s service territory — includes a nation-leading affordability policy that substantially lowers bills for most low-income customers.”
“It moves forward the state’s climate agenda by expanding energy efficiency while funding non-wire alternatives and other REV-like initiatives for smarter investments,” Rhodes added. “This decision is a win for the company’s customers and for the future of cleaner and more resilient energy.”
The PSC will allow National Grid to invest $2.5 billion over three years to reinforce and modernize its electric transmission and distribution system, including investments to address the increased frequency and severity of storms. Additionally, the PSC directed the company to seek out non-wires alternatives that allow it to provide safe and reliable service at a lower cost than traditional infrastructure investments.
The commission adopted refinements to the company’s collections practices, including: providing for electronic deferred payment agreements (DPAs); enhanced customer service messaging to ensure that customers know their options if they are behind on their utility bills; updated training materials; and ensuring customers are offered written confirmation of any non-DPA collection arrangements.
The commission also adopted a number of provisions that will facilitate the upgrading of street lights throughout National Grid’s upstate service territory to energy efficient light emitting diodes (LEDs). For municipalities that opt into the program, the company will replace company-owned failed roadway luminaires with LED luminaires. The company will also sell its street lighting assets to municipalities who wish to purchase them at the lowest price possible.
The PSC adopted updates to existing metrics based on recent performance, in line with metrics for other investor-owned utilities in the state. The areas of performance measured are leak-prone pipe removal; leak management; damage prevention; emergency response; and gas safety regulations performance.
The company will invest about $138 million to replace 150 miles of leak-prone pipe over the terms of the rate plan.