ALBANY — National Grid and officials with the state Public Service Commission have agreed to a proposal that would raise Upstate electric and gas rates roughly $189 million over three years — increasing residential electric bills about 2% in each of the three years. Natural gas bills will increase about 2% the first year and 3% in years two and three.

The settlement offer by National Grid won’t be final until the PSC votes on it. The commission could make changes to the plan or vote it down, however, the commission’s staff have signed off on the settlement, which usually indicates commission approval will follow.

“Our three-year agreement reflects the input of a broad range of stakeholders and is an important step forward in advancing New York’s clean energy future,” said National Grid’s New York President Rudy Wynter. “It maintains a focus on managing customer affordability in response to the economic downturn caused by COVID-19, while funding programs that will modernize our energy networks and promote economic growth in the state.”

The settlement is the result of 11 months of negotiations between National Grid and the PSC, officials said.  

The deal would raise electric bills by $1.88 each month in both the first and second year of the plan and $2.23 the third year for an average customer, who uses 600 kilowatt hours a month. Gas bills would increase by $1.51 a month the first year, $2.37 the second year and $2.56 the third year. Overall, the average consumer, who uses 82 therms a month, would see an increase of $40.68 altogether in the first year — $22.56 for electricity and $18.12 for gas.

According to an announcement by National Grid, the settlement has also received the approval of union officials, a group of large commercial and industrial customers and others.

Advocates for low-income customers and other groups had criticized National Grid’s original rate hike request as well as by environmental groups who said the utility company’s plan called for a continued investment in fossil fuel infrastructure. As of mid-August, nearly 233,000 customers owed National Grid $380 million in unpaid bills, PSC filings showed. Consumer advocates say that while some customers whose financial condition worsened during the pandemic can avoid service termination until December but many may face service shutoffs when the moratorium ends.

“We worked hard to strike a balance between prioritizing customer energy affordability and ensuring resiliency – especially in light of the record number of damaging storms we’ve seen in upstate New York – while deferring other programs and initiatives that would add to our customers’ bills,” Wynter said. He noted that, as part of the agreement, National Grid has committed to delivering a portfolio of programs that focus on energy efficiency, heating alternatives, and new technologies to help customers manage their energy use across the company’s 25,000-square-mile upstate New York service area.

According to National Grid, customer benefits included in the joint proposal include:

Enhanced energy affordability programs and services;

Investment in energy efficiency and demand response programs to help customers manage their energy use and bills;

Increases in additional clean energy solutions, including transmissions investments to unlock renewable energy, new non-pipes and non-wires alternatives, programs to promote heat pump and geothermal solutions, and initiatives and investments to support the deployment of electric vehicles;

Continued deployment of economic development programs that support the upstate New York economy, including $3.3 billion in capital investments to improve the safety, resiliency and reliability of National Grid’s energy networks that serve more than 1.6 million customers.

“The proposal will allow us to invest in programs necessary to maintain the safety and reliability of our networks and implement new initiatives to accelerate the transition to a cleaner energy future in support of the Climate Leadership and Community Protection Act goals.” Wynter said.

National Grid’s previous gas and electricity rate plans expired March 30. A proposal for new delivery rates was originally due in April 2020 but, given the impacts of the COVID-19 pandemic, the company decided to delay that filing until June 30, 2020, and used that time to refine and reduce the amount of the request.