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National Grid Seeks to Hike Rates

The first of three hearings seeking public comment on the proposed hikes is scheduled for Wednesday in Narragansett. The closest to Johnston will be in Warwick Sept. 25.

National Grid is seeking to raise RI rates on electricity and gas, and a series of public comment sessions begins tonight in Narragansett.

For National Grid Electric, the proposed rates will increase the company’s annual operating revenue by approximately $31.4 million, or 3.8 percent. The bill impact for a typical electric residential customer using 500 kWh per month would be a monthly increase of $3.97 or 5.1 percent, from $78.05 to 82.02.  The bill impact on electric commercial and industrial customers will range from an increase of -0.1 percent to an increase of approximately 6.7 percent.

A small part of the electricity rate hike, said Thomas F. Kogut, spokesman for the RI Division of Public Utilities and Carriers, will help National Grid recoup an $11 million deficit in its storm fund created by response to . National Grid had about $22.5 million in its storm response fund, and it spent about $33.5 million cleaning up and restoring service after Irene. That part will account for 25-cents of the monthly increase to each ratepayer's bill.

For National Grid Gas, the proposed rates will increase the company’s annual operating revenue by approximately $20.0 million, or 5.7 percent.  The bill impact for a typical residential gas heating customer consuming 922 therms per year would be an annual increase of $98 or 7.6 percent from $1,295 to $1,393. The impact on gas commercial and industrial customers will range from approximately 2.2 percent to approximately 7.2 percent.  

David Graves, spokesman for National Grid, said the balance of the electricity rate increase not going to the storm fund and the gas rate increase will go to operating expenses. Operating expenses include non-capital costs such as pension funds and collection of bad debt. Another operating expense they need to cover, he said, is an average 11-percent increase in property taxes on their land for power stations and telephone poles. "That's a good chunk of what we're looking for," Graves said. 

The commission may approve rates that could be higher or lower than those proposed by National Grid. Kogut said the PUC response to the proposal can be found along with that of the George Wiley Center on the agency's website. The George Wiley Center proposes that low-income customers paying reduced A-60 rates be protected from any increase, and that the number of customers paying the rate be expanded. 

Among other points, the PUC is recommending that National Grid's proposed adjustment for operations and maintenance (O&M) expenses related to capital spending be eliminated, saving $849,000. 

"The company is forecasting that  the capital spending will increase from $48,613,000 to $56,540,000 in the rate year. However, the company has not established that the capital spending activity in the projects or types of projects where the O&M expenses are concentrated will increase from the 2011 test year to the rate year. Thus even if the overall spending increases as forecasted by the company, it is not clear that the  related O&M expense will increase commensurately," writes PUC consultant David J. Effron.

The Narragansett public comment meeting will be held Sept. 5 at 6 p.m., Narragansett Town Hall, Council Chambers, 25 Fifth Avenue, Narragansett.

The closest to hearing to Bristol and Warren will be at the , Assembly Room, 120 Broadway, Sept. 19, 6 p.m.

See the attached .pdf for a full list of the public comment meeting schedule.

Miguel September 06, 2012 at 05:32 PM
How can the company justify raising rates when natural gas prices have dropped tremendously in the last 4 years! They are making lots of money by charging the same rates for a lot cheaper product! It should be more than enough to cover their distribution and delivery costs. http://www.usatoday.com/money/perfi/columnist/krantz/story/2012-09-05/investing-natural-gas/57611000/1

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