Look for lower bills in 2012 A typical household would see reductions of 6 percent beginning in January
We are changing our electric rates starting January 1, 2012. Many residential customers will see lower bills. So if you use the same amount of energy - or less - our residential customers should see bills go down by as much as 6 percent.

Why are these changes being made?
Changes are being made because some electricity costs are ending and some new ones are beginning. The changes are on both the delivery and supply sides of your electricity bill. We are structuring the changes to give our customers rate stability and an improved picture of their costs.

What else is changing?
We are changing how we collect costs and benefits of outstanding legacy contracts, and revising delivery rates. We are also changing the way we recover our cost of supplying electricity to our residential and small business customers. It ensures that our customers continue paying only what we pay for the electricity supply.

Will my electric bill look any different?
Yes, it will look a bit different. Most line items will stay, there will be two new line items, and in March one line item will disappear.

Will my electric rates go up or down?
That's a fair question. If our customers use the same amount of energy they've been using - or less - then they will see lower energy bills. The typical residential customer bill will be 6 percent lower overall, assuming equal usage.

Your electric bill covers the cost to deliver electricity, supply electricity, plus surcharges and other taxes which we are required to add to your bill in accordance with Regulatory Orders.

For the bottom line, these changes should result in lower bills if you use the same or lesser amounts of electricity.

What are the details of this rate change?
Changes to the delivery charge were recently approved on December 15, 2011. The first of these changes will begin on January 1, 2012.Changes to how we recover electricity supply costs were approved by the New York State Public Service Commission in July 2011.

These changes include ending the collection of approximately $573 million in competitive transition charges (CTC) on Dec. 31. The CTCs began in 2001 to collect historical costs associated with the company's transition to competitive deregulated supply markets.

This latest decision of the PSC also allows the recovery of approximately $236 million in past costs through a temporary charge over the next 15 months. The deferred expenses -- extraordinary storm costs, pensions, tax or regulatory changes, environmental costs and others -- were incurred over the last ten years but were set aside for later recovery.

Please note that a portion of the deferral account is tied to the company's commitment to spend nearly $1.5 billion on electric transmission and distributions systems in upstate New York over the past five years, a target the company achieved ahead of schedule.

The net result is an overall reduction in delivery bills for all customer classifications, and continued rate stability for at least the next 15 months.

You will see specific changes to line items on your electric bill.

The Delivery Charge Adjustment, currently a part of the "Delivery Adjustment" item in the Delivery Services section of the bill, will be moved to the new ESRM (Electric Supply Reconciliation Mechanism) line item that will be shown in the Supply Services area of the bill. This change will help provide a better picture of Supply Costs for customers when comparing other supplier offers. Customers who have previously chosen a supplier to provide their supply will not see the ESRM line item on their bill.

The Market Rate Service option will be removed. Customers who are currently on the Market Rate Service option wanting to continue to receive market-priced service can do so by choosing an alternative energy supplier, or ESCo, that offers market price service. If they do not choose an alternative energy supplier, they will receive their electricity supply service based upon National Grid's new electricity supply rates effective January 1, 2012. These new electricity supply rates are intended to provide our customers with more stable bills throughout the year with less volatility than market price service.

In addition, for residential and small commercial customers, the Commodity Adjustment Charge will be eliminated on March 1 (currently the CAC is included in the Delivery Adjustment line on bills.)

Is there a timeline for these changes?

1/01/2012	   The first of these changes will begin on January 1, 2012. January 2012's Batch 
	   #1 commodity billing rates go into effect, as well as new LTC and ESRM rates.  
	   The Delivery Adjustment on customer bills stay in effect (DCA goes to zero, but 
	   the CAC remains thru Feb 29).



3/01/2012	   Delivery Adjustment line on customer bills is eliminated.

Are there other advantages to this rate change?
It will be easier for our customers to compare National Grid's electricity Supply Costs to different potential supply providers. All supply related costs are shown in the electricity supply section of the bill. Previously, there were certain parts of the supply cost in the Delivery Adjustment line of the bill.

Impact of reductions on delivery portion of bill & total bill
The chart below illustrates the impact of today's decision on average customer bills by rate classification, assuming equal usage.