PSC Seeks Public Comments on Case 10-E-0050 - National Grid's Proposed Electric Rate Increase

PSC Seeking Public Comment on Rate Proposal

The New York State Public Service Commission seeks public comments on Niagara Mohawk Power Corporation, d/b/a National Grid's proposed rate increase for its electric operations.  Public statement hearings will be held before an Administrative Law Judge.

 

Public Statement Hearings

Syracuse Tuesday, October 26, 2010 4:00 p.m. and 6:30 p.m. City of Syracuse Criminal Courthouse 505 South State Street 1st Floor, Room 120 Syracuse, NY 13202

Albany Wednesday, October 27, 2010 4:00 p.m. and 6:30 p.m. Colonie Town Hall 534 New Loudon Road Latham, NY 12110

Buffalo Wednesday, November 3, 2010 4:00 p.m. and 6:30 p.m. Common Council Chambers 65 Niagara Square Room 1413 Buffalo, NY 14202

Background

On January 29, 2010, Niagara Mohawk Power Corporation d/b/a National Grid (National Grid or Company) filed a request with the New York State Public Service Commission (Commission) for approval to increase revenues (the total amount of money collected from customers through the rates they pay) for electric delivery service.  The Company also proposed to defer collection of some amounts it is owed by customers, to offset the delivery rate increase.  New rates would take effect February 1, 2011.

 Under New York State Law, the Commission must consider a utility's proposal and may adopt or reject it in whole or in part, or adopt changes not proposed by the Company.  An Administrative Law Judge is presiding over the gathering of public comment and all evidence relating to the proposal.

Summary of Rate Case

The Company requested an increase in electric revenues of $391 million for 2011 (a 12.15% increase in revenues).  National Grid stated that there are a number of reasons for the request, including the overall increase in the costs of providing service and infrastructure investments required to provide safe, reliable, and efficient service.  Under National Grid's plan, monthly bills would not increase because the utility would defer some long-term debts it collects from customers, spreading out the collection over a longer period of time.  In its May 3, 2010 corrections and updates filing, the Company reduced its requested base rate increase to $368.8 million or 11.08%.  On August 6, 2010, the Company increased its requested rate increase to $403 million.  On August 30, 2010, the Company removed $4.266 million from its cost of service to reflect what it referred to as "misallocations" of costs.  This adjustment includes $3.378 million of expatriate expenses (travel) and about $784,000 of officer and director employee expenses and inflation.

 Department of Public Service (DPS) Staff and other parties have evaluated the facts and circumstances of the Company's request.  DPS Staff analyzed National Grid's request and presented a one year case that would decrease revenues by $15 million dollars, or 0.465% and provide no bill increases to customers.  Major factors for this $383.8 million difference include return on equity, capital structure, depreciation, storm expenses, employee bonuses, and austerity savings.  DPS Staff's proposal also would permit more rapid recovery of debts to be collected from customers, than under the Company's proposal.

How to Comment on the Case

The Commission seeks public comments concerning National Grid's proposal.  Interested members of the public may comment as noted below.  Your comments should refer to "Case 10-E-0050 - Niagara Mohawk Power Corporation d/b/a National Grid - Electric Rates."

1. Write to: Honorable Jaclyn A. Brilling, Secretary, NYS Public Service Commission, Three Empire State Plaza, Albany, NY 12223-1350.
2. Submit comments electronically by accessing the Department's website - http://www.dps.ny.gov. Click on "Electric" and "National Grid Electric Rate Case" and fill in the "PSC Comment Form." Many libraries offer free Internet access.
3. Call the Department's Toll-Free Opinion Line at 1-800-335-2120. This number is designed to take comments about pending cases from in-state callers 24 hours a day. Callers should press "1" to leave comments regarding "Electric Issues."

All comments should be submitted, or mailed and postmarked, by no later than November 30, 2010.  All public comments received by the Commission will be placed in the official case file and subject to public inspection.  Persons interested in National Grid's rate filing may view it at the Commission's offices at Three Empire State Plaza, 14^th Floor, Albany, New York and 90 Church Street, New York, New York (bring picture identification for a security check), or on the Commission's website http://www.dps.ny.gov.

Next Steps

The Commission will formally consider the case at one or more regularly scheduled public meetings.  Following its discussion and deliberations at such meetings, the Commission will issue a written order.

For more information on how to submit your comments and what the next steps will be in this case, you can click on this fact sheet or go to the New York State Public Service Commission's website at http://www.dps.ny.gov.