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National Grid’s rates OK’d by Public Service Commission

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National Grid customers across the north country will see their monthly gas and electric bills drop in April.

But there’s a catch to the company’s three-year plan approved by the state Public Service Commission on Thursday: after taking a dip the first year, customers will see their bills increase in years two and three.

Over the three years, National Grid’s statewide delivery revenues will increase $123 million from where they are now; gas revenues will jump by $8.8 million over that span.

Customers will see total electric delivery charges drop by 8.7 percent the first year, but then increase by 2.8 percent in each of years two and three.

Natural gas customers will see delivery charges drop 6.7 percent the first year, then increase 4.8 and 4.9 percent in the second and third years, respectively.

The average household will reap benefits for the first year of the plan beginning in April. For electricity charges, that decrease was made possible by the expiration of a $190 million surcharge and return of deferred customer credits; previously, that surcharge was established for National Grid to recoup operational costs. Because that surcharge is gone, increasing utility rates by $123 million over three years will still leave customer bills lower than they are today.

Households’ monthly electric bills are estimated to drop about $5.40 on average in April; and at the end of three years, bills are expected to be approximately $1.25 lower than today. But that could change based on the natural flux of supply prices.

National Grid will drop its revenues from natural gas by $3.29 million the first year. Revenues then would increase by $5.85 million the second year and $6.26 million the third year. Starting in April, the average household will see its monthly bill decrease by about $3.40 for natural gas. But when the plan ends in 2016, it likely will pay about $2.30 more than it is now.

The PSC is responsible for negotiating with National Grid to set its rates, while supply charges are determined by market prices. Under the deal, average households using 600 kilowatt-hours of electricity per year are expected to see annual delivery charges decrease in April from $52.61 to $47.21. That charge would rise to $49.61 in 2014, then to $51.22 in 2015.

Effective in April, households that use an average of 1,000 therms of gas will pay $440 in annual delivery charges, compared with $479 the previous year. Annual delivery charges are projected to increase to $471 in 2014, and to $490 in 2015.

The multiyear plan approved Thursday is a result of about a year of negotiations and public hearings conducted by PSC.

“We have worked hard on this plan with multiple parties over the past year and believe it is in our customers’ best interest,” Ken Daly, president of National Grid, said in a prepared statement. “This plan expands on recent rate reductions and holds energy costs steady for our customers while enabling us to continue to increase infrastructure investment.”

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