May 7,2009
National Grid’s commitment to invest nearly $1.5 billion over five years in its upstate New York electricity network as part of a broad effort to improve reliability is demonstrating positive results. The company met or exceeded all of its state monitored electric reliability targets in 2008, the first time it has done so since 2003 and the continuation of a three year trend of improvement.
Results have been submitted to the New York State Department of Public Service under the service quality assurance program, part of a long-term rate and service agreement. The service quality program includes potential penalties if the company does not meet agreed-to results in a calendar year.
The electric reliability measures track results for the average number of sustained outages per customer per year, the average duration of outages, and the number of momentary outages recorded on the company’s transmission, sub-transmission and distribution networks.
“More than two years ago we began this commitment to improving the reliability of our delivery network, because our customers both deserve and expect it,” said Tom King, president of National Grid in the U.S. “While there is still much work to be done, our recent results confirm that the investment is necessary, and it works.”
The company has shown steady improvement over the past three years in the metrics that measure the number and length of service interruptions. In 2008, the number of customers who experienced interruptions outside of major storms was down 19 percent from the previous five year average. Also, the number of customers interrupted from deteriorated equipment and lightning – a major focus of the company’s reliability enhancement plans - was more than 30 percent below the previous five-year average.
National Grid and its customers faced a particularly difficult year in 2008 with regard to weather and major storms that interrupted electric service. Across its upstate New York service area, National Grid experienced 24 severe weather events that are classified as major storms – more than double the previous five year average. The year culminated with devastating December ice storm that hit eastern New York and New England, with nearly 183,000 customers affected in New York alone.
As a result, total customer interruptions increased by some 13 percent last year, despite an 11 percent decrease in interruptions outside of major storm events. The majority of reported major storms involved snow, ice, wind, or some combination of those factors.
National Grid has implemented infrastructure plans that replace aged electric grid equipment, increase maintenance and inspection efforts, and enhance vegetation management efforts.
“We continue to believe that improving reliability through investment in the infrastructure must be viewed as a long-term issue,” King said. “We are very pleased with the near-term results from the measures we have taken over the last several years, but our goal is continued improvement and sustained reliability over the long haul.”
National Grid’s annual capital expenditures in New York have exceeded the levels anticipated in the long-term rate agreement, and have averaged about 40 percent more than historic levels prior to the National Grid/Niagara Mohawk merger in 2002.
As part of its service quality plan, the company also reported that it met or exceeded targets in five customer services areas, including meter reading, rates of complaints to regulators, the number of customer calls answered within 30 seconds, administration of the Low Income Customer Assistance Program, and commercial customer satisfaction with contacts with the company.
The only target not met was a measure of residential customer satisfaction based on surveys of customers who had a recent transaction or contact with the company. The actual result for the measure in 2008 improved over the prior year, but fell just short of the target.
“Our research shows that results in this area continue to be heavily influenced by customer perceptions regarding energy commodity prices, even though we do not control those prices or profit from them,” King said. “Clearly, we need to continue our efforts to help customers understand their energy bill, and help them manage their energy usage as a way to control that bill.”
The missed satisfaction target carries a potential penalty of approximately $512,500, which is credited to customers as an offset against other costs in future rate setting.National Grid is one of the largest investor-owned energy companies in the world. It is an international energy delivery company. In the U.S., National Grid delivers electricity to approximately 3.3 million customers in Massachusetts, New Hampshire, New York, and Rhode Island, and manages the electricity network on Long Island under an agreement with the Long Island Power Authority (LIPA). It is the largest distributor of natural gas in the northeastern U.S., serving approximately 3.4 million customers in Massachusetts, New Hampshire, New York, and Rhode Island. National Grid also owns over 4,000 megawatts of contracted electricity generation that provides power to over one million LIPA customers.