June 04,2009
On Friday, May 29, the New Hampshire Public Utilities Commission issued an order on a natural gas distribution rate proposal that National Grid filed in February 2008.
The order will result in a total annual bill decrease of about 2.9 percent, or $28, less than what a typical residential heating customer has been paying since August 24, 2008, when a temporary rate increase went into effect. The new rate will take effect on July 1 for National Grid's 85,000 New Hampshire gas customers and will be retroactive to August 24, 2008. National Grid will credit customers the difference between the rate in effect since August 24, 2008 and the new rate, less any rate case expenses.
This was the first time in 15 years that National Grid or its predecessor companies requested gas distribution rate relief. National Grid sought the increase primarily to cover the cost of investments already made in its natural gas infrastructure, as well as fund ongoing investment that will enable continued safe and reliable delivery of gas to customers. The infrastructure-intensive nature of the natural gas delivery system requires National Grid to continuously attract funds to make repairs and upgrades as well as keep pace with customer demand.
The company and the other parties to the case entered into a settlement that reduced National Grid's original rate increase request by more than 40 percent and resolved all issues, except for the PUC’s ruling on the return on equity that would be applied to the company’s investments in the system. In its order, the Commission granted a return on equity that is well below the industry standard.
Tom King, president of National Grid in the U.S. said, “We have always been and remain committed to delivering natural gas safely, reliably and efficiently and providing a level of service our customers expect and deserve. King added, “But to serve New Hampshire well, we must be allowed to recover our costs and earn a return that is at least up to industry standards. Therefore, we are disappointed with the Commission’s decision.”
King concluded, “We have a long and proud legacy in the Granite State. If we are unable to reach agreement for essential investment that customers need and earn a satisfactory return, then we will have to reassess our options, including whether it is right that we continue to operate in New Hampshire. We question whether the PUC’s decision is in the long-term best interest of our customers.”
National Grid 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.