National Grid asked to recalculate $71M rate hike after tax reform

Updated: 1:05 p.m.

A NATIONAL GRID RHODE ISLAND van at Cranston and Bridgham streets in Providence. / PBN FILE PHOTO/ELI SHERMAN
A NATIONAL GRID RHODE ISLAND van at Cranston and Bridgham streets in Providence. / PBN FILE PHOTO/ELI SHERMAN

PROVIDENCE – In wake of the new federal tax law, state regulators are asking National Grid Rhode Island to recalculate a proposed rate increase that would cost gas and electricity customers $71.6 million more each year.

The R.I. Public Utilities Commission sent a letter to National Grid, the state’s largest utility, asking it to make the calculation based on several factors, including the new corporate tax rate, which fell to 21 percent from 35 percent beginning Jan. 1.

“Please recalculate the revenue requirement for [National Grid] that results from the changes in the tax code,” according to the letter.

In November, National Grid proposed raising the estimated $71.6 million by increasing the rate it charges for the delivery of gas and electricity. The increased funding would help offset increased business costs realized during the last five years, including property taxes, health care, labor and equipment.

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The company, serving about 492,000 electricity customers and 267,000 gas customers, hasn’t full readjusted its rate since 2012. But the original proposal was based on estimates made prior to the passage of tax reform.

The business community has largely reported the new tax code will have a net positive impact on the bottom line, especially given the savings realized from the lowered tax rate.

And the PUC, responsible for determining whether National Grid’s proposed rates are fair to both the company and ratepayers, is not alone in asking utilities to recalculate.

Since U.S. Congress approved the sweeping tax overhaul last month, states across the country have made similar requests to utilities in regulated energy markets.

Eversource, one of the largest utilities in Massachusetts, has already announced its customers will see a $35.4 million reduction in rates instead of a previously announced $12.2 million increase, according to Bloomberg. That’s nearly a $50 million benefit to Massachusetts ratepayers.

National Grid is expected to respond to the PUC request by Thursday.

“We’re excited that the new tax law will provide real benefits to our customers,” wrote Ted Kresse, National Grid spokesman, in an email. “We are working with our regulators and stakeholders, and we will ensure the tax savings are fully realized and used to benefit our customers through their bills.”

­Eli Sherman is a PBN staff writer. Email him at, or follow him on Twitter @Eli_Sherman.

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