National Grid withdraws proposal to hike R.I. gas rates

NATIONAL GRID RHODE ISLAND has withdrawn its Interim Gas Cost Recovery filing, which sought to raise gas prices for the next 10 months in anticipation of budget shortfalls. / PBN FILE PHOTO/ MARK S. MURPHY

PROVIDENCE – Changing market forecasts and a calculation mistake will spare National Grid Rhode Island customers from at least some of the proposed increases in their gas bills this year.

In a Jan. 14 letter to state energy regulators, announced with an open meeting notice on Thursday, National Grid said it was withdrawing its Interim Gas Cost Recovery filing. The proposal, originally filed in November, called for increasing rates for natural gas usage for a 10-month period, tacking on an extra $61.67 to the average residential customer’s bill during that time.

The proposed increases were intended to offset a projected $19.2 million shortfall in National Grid’s gas budget – about 11.5% of its annual gas revenue – due to rising energy prices forecasted by the New York Mercantile Exchange.

Volatile markets mean fluctuating prices, though, and the August projections on which National Grid based its original filing now look a lot different. More-recent forecasts suggest gas prices will not rise by as much as expected, closing the budget gap facing National Grid by about $6 million, according to the letter.

- Advertisement -

Further driving down the budget shortfall was a number-crunching error National Grid recognized during its updated submissions to the R.I. Public Utilities Commission, according to its letter.

Together, these changes bring down the company’s budget shortfall to $7.9 million, which is less than 5% of its gas revenue. The company can only propose to increase rates beyond its annual filings if it anticipates a budget gap of more than 5%, according to its Gas Cost Recovery clause.

National Grid is still forging ahead with other increases to gas and electric prices to help pay for its energy efficiency program, however. As proposed in the 2022 Energy Efficiency Plan, the average residential customer would see their gas and electric bills increase by 2.2% and 1.3%, respectively, beginning Feb. 1.

The Public Utilities Commission, which must sign off on any rate increases, is slated to review and vote on the Energy Efficiency Plan at a meeting on Jan. 25. The commission will also discuss the withdrawal of the gas recovery cost filing, according to the meeting agenda.

Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.

No posts to display

1 COMMENT

  1. Energy Efficiency Plan investments must, by law, be less than the cost of procuring the additional energy supply that otherwise would be required. So, energy efficiency investments should not be described as adding costs to utility bills, but rather avoiding other higher costs that would otherwise be incurred. As noted below, the plan as filed would save ratepayers $80 million over the life of the investments.

    For instance, as this year’s EE plan states: “Based on the Company’s calculation, the total cost of energy efficiency for the electric portfolio is $143.2 million and the total cost of electric supply to meet the same need would be $205.3million. This is a total savings of $62.1 million over the life of the installed energy efficiency measures from investing in
    energy efficiency instead of electric supply. The total cost of energy efficiency for the natural gas portfolio is $45.3million and the total cost of natural gas supply to meet the same need would be $64.2 million. This is a total savings of $18.9 million over the life of the installed energy efficiency measures from investing in energy efficiency instead of natural gas supply”