National Grid rate proposal will not raise customers' bills

On Jan. 29, National Grid submitted an electric rate case proposal to the New York State Public Service Commission for the first time since the 2002 merger of Niagara Mohawk with National Grid. Since the proposal was filed, however, a few misconceptions regarding its contents have surfaced.

First, National Grid customers should know that, in recognition of these challenging economic times, the company has structured its rate proposal to have little or no effect on most customers' overall bills. Contrary to a recent letter in this space, customer bills will not increase by 20 percent, should the Public Service Commission approve the proposal.

National Grid has not had a base electric delivery rate increase since 1995, and reduced base delivery rates by 8 percent in 2002. Today's existing rate structure simply does not allow us to fully recover costs necessary to operate the business. If approved, National Grid's new proposal would take effect January 2011 and continue through the end of 2013. The proposal would replace the final year of our current rate plan.

In the new proposal, the company will file for recovery of out-of-pocket costs it will incur at an average of $390 million per year over current rate levels. At the same time, the company is also proposing to delay the full recovery of previously incurred costs that would have been collected in 2011 and instead will spread those over an additional three years through the end of 2014, reducing that charge on customer bills. That reduction will offset the proposed increase to base delivery rates and result in little or no change in delivery bills for the vast majority of customers.

Essentially, our proposal will allow us to meet the needs of our 21st century customers while having as little impact as possible on your bill. The plan we have before the PSC will allow us to continue to provide the most energy-efficient, safe and reliable service possible.

Susan M. Crossett

Syracuse

The writer is vice president, Energy Solutions Services, National Grid.