The New York State Public Service Commission has approved a joint proposal that will set new three-year electric and gas rate plans for National Grid, significantly reducing the company’s original request for increased revenues. The agreement was reached with 15 parties, including National Grid, Department of Public Service staff, consumer advocates, trade and labor groups, and large industrial customers.
National Grid had initially sought a one-year base delivery increase of $509.6 million for electricity and $156.5 million for gas. Under the new plan adopted by the Commission, increases to electric revenues will be $167.3 million in the first year, $297.4 million in the second year, and $243.4 million in the third year. Gas revenue increases are set at $57.4 million, $64.5 million, and $71.8 million over the same period.
According to the Commission, this action reduces National Grid’s requested total electric delivery revenues by more than $340 million—a 67% decrease—and gas delivery revenues by nearly $100 million—a 63% decrease—in the first year alone.
Rory M. Christian, Chair of the Commission, stated: “The adopted joint proposal meets the legal requirement that the company continue to provide safe and adequate service at just and reasonable rates. The three-year rate plan is in the public interest. It is a forward-looking plan that benefits customers and includes provisions that further important state and Commission objectives, while keeping customer affordability first and foremost in mind.”
The joint proposal also includes annual efficiency savings of $110 million and defers non-essential capital projects while supporting energy affordability programs for vulnerable customers.
Fifteen parties signed onto the agreement, including Multiple Intervenors, New York Solar Energy Industries Association, Alliance for a Green Economy, Independent Power Producers of New York, NYGEO, Turning Stone Enterprises, U.S. Department of Defense, Fedrigoni Special Papers North America, Empire Natural Gas Corporation, New Yorkers for Clean Power, New York Power Authority, and IBEW Local 97. Other active parties such as Environmental Defense Fund did not oppose it.
The plan calls for capital investments totaling about $4.3 billion for electric infrastructure and $1 billion for gas infrastructure to maintain safe and reliable service across upstate New York’s 2.3 million National Grid customers.
Governor Kathy Hochul directed Department of Public Service staff to scrutinize National Grid’s initial rate case due to concerns about affordability. The Commission emphasized its responsibility to balance system reliability with minimizing costs to consumers.
Main factors driving rate changes include investments needed to maintain safety—such as replacing leak-prone pipes—increases in operation and maintenance expenses necessary for running electric and gas businesses efficiently; as well as market-based returns on equity so National Grid can secure funding at reasonable rates.
In subsequent years of the plan (years two and three), increases are mainly attributed to higher operation costs (O&M), depreciation expenses from aging assets or new investments coming online; property taxes; plus additional capital expenditures.
The agreement maintains or enhances previous provisions related to customer service performance metrics; gas safety standards; support for low-income households; energy affordability measures; and encourages exploration of non-pipeline alternatives.
Levelized total electric revenue increases under this plan will be 3.4 percent in year one; 5.6 percent in year two; 4.6 percent in year three—while levelized total gas revenue increases will be 5.5 percent each in years one and two; rising slightly to six percent in year three.
Nearly 9,000 public comments were reviewed during this process after being made available for comment through multiple hearings—including three held in person—and an evidentiary hearing as part of regulatory review procedures.
Details on today’s decision can be found on www.dps.ny.gov by searching Case Number 24-E-0322 or 24-G-0323.
