PROVIDENCE – National Grid Rhode Island has proposed to reduce a rate hike it seeks from gas and electricity customers by about $26 million as a direct result of federal tax reform.
The state’s largest utility originally proposed a $71.6 million increase to the amount it charges ratepayers to deliver gas and electricity. It now seeks an adjusted amount to the tune of about $45 million, including more than $19 million realized in tax savings.
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As of Jan. 1, the corporate tax rate fell to 21 percent from 35 percent. As a result, state regulators asked the utility to recalculate its proposal.
Timothy Horan, president and chief operating officer of the Rhode Island subsidiary of National Grid PLC, lauded the new tax law in a statement.
“Today’s announcement is a key indicator of how this new tax law can provide real benefits to National Grid’s customers,” Horan said. “We are committed to ensuring that the tax savings of the legislation are fully realized and are used to help our customer in their energy bills.”
The utility is currently seeking the rate hike as part of a periodical adjustment to rates it requests from state regulators. The upward adjustments are meant to offset the increased cost of doing business. The last time the company sought a full adjustment to rates was in 2012.
The R.I. Public Utilities Commission is responsible for determining whether the request is equitable to both the company and ratepayers. The commission is excepted to make its decision by September.
Meanwhile, the R.I. Division of Public Utilities and Carriers (a separate entity from the PUC) released a statement following National Grid’s announcement saying it would independently review the utility’s calculations to ensure the “maximum value be returned to the ratepayers.”
Under the revised proposal, gas and electricity customers would still see an increase to their monthly bills. Although the impact would be less than what was originally proposed.
National Grid serves about 492,000 electricity customers and 267,000 gas customers. It’s one of several businesses to announce financial windfalls as a result of the sweeping tax overall U.S. Congress approved last month.
A breakdown of how all the savings were calculated was not immediately available.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
