Grid seeks 15.6% rate increase to recoup costs from cold snap
The last days of December and the first days of the New Year were painfully cold, with temperatures hovering around zero. At least for the foreseeable future, such temperatures aren’t in the forecast. But that doesn’t mean natural gas customers won’t be feeling the pain in their pocketbooks.
Those frigid conditions resulted in a spike in gas usage, and when the demand is high and supply limited, the price goes up. That’s just what happened, and in order for National Grid to meet the demand it spent $34.4 million more than it had built into the standard offer rate. Now it is looking to get the money back.
At a hearing Feb. 26 at 11 a.m., the Public Utilities Commission will consider the company’s gas cost recovery, or GCR request, of a 15.6 percent rate increase for an average residential heating customer using 396 therms. If approved, the rate increase – $11.87 per month, or $94.84 a cycle for the average heating customer – would take effect March 1 and remain in place through October.
It could be worse, according to the filing National Grid made on Jan. 29.
“To moderate the immediate customer bill impact of National Grid’s proposal, the company is proposing to recover approximately $22.8 million of the deferred gas cost balance during the period March 2018 through October 2018 and to defer recovery of approximately $11.6 million for recovery during the November 2018 through October 2019 GCR year,” it reads.
“It tempers the impact,” PUC spokesman Thomas Kogut said of deferring a portion of the recovery to the following billing rate cycle.
Kogut also responded to calls for a reduction in utility rates reflecting the cut in corporate taxes from 35 to 21 percent as part of the tax reform package introduced by the president and enacted by Congress.
“Rhode Islanders are being kept in the dark about additional, immediate rate relief they are entitled to on their energy bills. It’s simple: the utility’s tax relief should match the consumer’s rate relief. The utility company received tax relief beginning January 1. Rhode Islanders should receive rate relief beginning January 1,” McKee said in a press release issued Wednesday.
“This money belongs in the pockets of hardworking Rhode Islanders, not in the coffers of corporate shareholders. Gaining the support of the House, and soon the Senate, should send a strong message to the utility company,” he said.
Late last month, the House approved a resolution calling on the PUC to promptly reexamine and reduce current energy rates in relation to the reduction in the corporate tax.
“We have appending rate case data request,” Kogut said.
He said National Grid has been asked to recalculate rates based on a 35 percent reduction in their corporate taxes. He noted that would also apply to other services regulated by the PUC such as interstate navigation and the Block Island ferry.