WALTHAM, Mass. – In officially requesting approval from the R.I. Public Utilities Commission to hike electricity distribution rates by 11.2 percent, National Grid today pointed to what it said would be the benefit: a multiyear infrastructure improvement project that would “enhance reliability and meet the changing needs and expectations of its customers.”
The energy provider filed the request today and, if approved, the rate increase would take effect Jan. 1, 2010. It would increase the “typical” residential bill by $8.95 per month, the company said.
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“We are acutely aware that it’s difficult to raise rates for customers, especially in a challenging economic environment,” National Grid U.S. President Tom King said in a statement. “However, we must increase our investment in the electric distribution system in Rhode Island in order to replace aging infrastructure and ensure that proper maintenance and operating costs are covered. Replacing this aging infrastructure will produce long-term benefits for customers by increasing the reliability and safety of the system.”
The distribution rate is the cost applied by the company for delivery – a portion of the bill that’s not tied, as the commodity rate is, to market supply and global pricing. The distribution rate in Rhode Island has not been increased since 1998, according to National Grid. The company also said that rate has twice been lowered since it was last raised 11 years ago.
In announcing that it would formally seek a distribution rate-hike approval today, the company cited a “sharp” increase in distribution network investment since 2000. The company has put “nearly $300 million” into upgrades in Rhode Island, although “it has not been able to recover a large portion of these costs.”
National Grid plc, a British company and Rhode Island’s main gas and electricity provider, had announced last month that for the year ending March 31 its net profit fell 70 percent to 944 million pounds ($1.4 billion.) The company had also reported a 53 percent increase in operating costs, in part caused by severe ice storms in the Northeast last winter.
The filing also seeks to decouple revenue and kilowatt hour sales, a move that would remove “an obstacle to aggressive pursuit of energy efficiency” and pricing in response to demand, National Grid said.
National Grid – a division of the U.K.-based National Grid plc (NYSE: NGG, LSE: NG) – distributes electricity to approximately 3.3 million customers in Massachusetts, New Hampshire, New York and Rhode Island and natural gas to about 3.4 million customers in those states. Additional information is available at NationalGridUS.com.
For information about the R.I. Public Utilities Commission and its Division of Public Utilities and Carriers – including the text of recent filings by local utilities and other regulated businesses – visit www.ripuc.org.
Haven’t the public been screwed enough, now rate hikes need to be done in order to fix and old infrustructure, isn’t that what a company would budget for? If a company needs to improve any area of itself it can raise prices, raise rates or take the money out of the pocket of the people paying in? Wow, RI is an interesting place to live. Hey, I need to save a bit more for my childrens college fund, so I am going to start paying my mortgage company $100 less each month and put it in a college fund, I am sure they will understand. HUH?
What a crock – a rate freeze – I think not! Check out this Headline form projo back on July 11, 2008. That is less than 1 year.
PUC OKs increased electricity, gas rates 12:04 PM EDT on Friday, July 11, 2008
By Paul Edward Parker
Journal Staff Writer
Starting Tuesday, National Grid customers in Rhode Island will pay 21.7 percent more for electricity and 8 percent more for natural gas, the Public Utilities Commission voted yesterday.
Oops the truth us out