PSC Dramatically Lowers National Grid’s Rate Request

PSC Dramatically Lowers National Grid’s Rate Request
— Company’s Initial $407M Request Cut by $351 Million or 86%; New Stakeholder-
Supported Plan Lowers Bills for 220,000 Low-Income Customers; Significantly Improves
Energy Efficiency, Renewable Energy, Gas Safety & Infrastructure Resiliency —

ALBANY —The New York State Public Service Commission (Commission) today adopted a joint
proposal by Department staff, National Grid, and 17 interested parties representing customer,
municipal, labor, and environmental interests. The decision establishes three-year electric and gas
rate plans that limit the overall revenue increases in the first year to only $43 million or 1.7 percent for
electric customers, and only $13 million or 2.4 percent for natural gas customers. The Commission’s
decision represents a far better outcome for customers than the company’s initial request for a $326
million revenue increase in electric rates or 13 percent, and an $81 million increase or 14 percent in
natural gas rates.

Under the new rate plan, a typical residential customer using 600 kWh of electricity per month would
see a total monthly bill increase of $2.22 or 2.9 percent in the first year starting in April 2018, $3.03 or
3.8 percent in the second year starting in April 2019, and $3.25 or 3.9 percent in the third year
starting in April 2020. A typical residential customer using 77 therms of gas per month would see a
total monthly bill increase of $1.20 or 1.7 percent in the first year, $3.10 or 4.5 percent in the second
year, and $3.18 or 4.4 percent in the third year. Eligible low-income electric customers will see a bill
reduction of up to 55 percent.

“We are pleased to adopt a progressive rate plan that is much improved over what the company
initially proposed,” said Commission Chair John B. Rhodes. “The plan — endorsed with broad
stakeholder support by environmental groups, labor, large business customers, and the three largest
cities in the company’s service territory — includes a nation-leading affordability policy that
substantially lowers bills for most low-income customers. It moves forward the State’s climate agenda
by expanding energy efficiency while funding non-wire alternatives and other REV-like initiatives for
smarter investments. This decision is a win for the company’s customers and for the future of cleaner
and more resilient energy.”

Details of the Commission’s decision include:

Low-Income Discount Program: The Commission adopted funding for an energy affordability
program providing discounts to qualifying customers in accordance with the Commission’s
nation-leading framework for the design of low-income programs. This decision implements a
policy which seeks to limit energy costs to no more than 6 percent of household income for the
approximately 2.3 million low-income households in New York. Beginning next winter, National
Grid is expected to have 160,000 electric low-income customers and 60,000 low-income gas
customers. This program will result in substantial bill reductions (as much as 55 percent) for
most low-income households.

Capital Investment: The Commission will allow National Grid to invest $2.5 billion over three
years to reinforce and modernize its electric transmission and distribution system, including
investments to address the increased frequency and severity of storms. Additionally, the
Commission directed the company to seek out non-wires alternatives that allow it to provide
safe and reliable service at a lower cost than traditional infrastructure investments.

Service Quality Assurance Program: The Commission adopted customer service metric
updates based on recent performance and brings the company in line with metrics for other
investor owned utilities in New York.

Terminations and Uncollectibles Incentive: The Commission adopted the implementation of
a mechanism that incents the company to reduce both the number of terminations and the
aggregate amount of uncollectibles attributable to residential customer accounts.

Collections Agreements: The Commission adopted refinements to the company’s collections
practices, including: providing for electronic deferred payment agreements (DPAs); enhanced
customer service messaging to ensure that customers know their options if they are behind on
their utility bills; updated training materials; and ensuring customers are offered written
confirmation of any non-DPA collection arrangements.

Street Lighting: The Commission adopted a number of provisions that will facilitate the
upgrading of street lights throughout National Grid’s upstate service territory to energy efficient
light emitting diodes (LEDs). For municipalities that opt into the program, the company will
replace company-owned failed roadway luminaires with LED luminaires. The company will also
sell its street lighting assets to municipalities who wish to purchase them at the lowest price

Energy Efficiency: The Commission adopted increasing the targets for the company’s
energy-efficiency program by 40 percent while increasing program funding by only 20 percent,
thus reflecting the cost-effective nature of National Grid’s energy-efficiency programs.

Gas Safety Performance Metrics: The Commission adopted updates to existing metrics
based on recent performance, in line with metrics for other investor-owned utilities in New York
State. The areas of performance measured are leak-prone pipe removal; leak management;
damage prevention; emergency response; and gas safety regulations performance.

Gas Safety Enhancements: The Commission approved using shareholder funds to enhance
gas safety through six programs that include the distribution of residential methane detectors,
initiatives aimed at pipeline damage prevention, and enhanced first responder training
programs. The company will invest about $138 million to replace 150 miles of leak-prone pipe
over the terms of the rate plan.
Since the beginning of this case, Department staff has worked tirelessly to minimize cost increases by
advocating progressive outcomes regarding affordability, energy efficiency, and the environment. The
Commission’s decision also reflects the impact of changes to the federal corporate tax rate and
bonus depreciation prospectively, with a net first-year benefit for customers totaling $76 million.
These benefits are reflected in, and moderate, the revenue requirement increases.
Parties that signed the joint proposal included Department of Public Service staff, Multiple
Intervenors, PACE Energy & Climate Center, Environmental Defense Fund, NY-Geothermal Energy
Organization, Tesla, ChargePoint, Great Eastern Energy, Mirabito Natural Gas, Blue Rock Energy,
Direct Energy, NY State Office of General Services, Wal-Mart East/Sam’s East, NYPA, IBEW Local
97, and the cities of Albany, Buffalo, and Syracuse. Under the rate plan adopted by the Commission,
National Grid will add 245 new jobs over three years.
Today’s decision may be obtained by going to the Commission Documents section of the
Commission’s Web site at and entering Case Numbers 17-E-0238 and 17-G-0239 in
the input box labeled "Search for Case/Matter Number". Many libraries offer free Internet access.
Commission documents may also be obtained from the Commission’s Files Office, 14th floor, Three
Empire State Plaza, Albany, NY 12223 (518-474-2500). If you have difficulty understanding English,
please call us at 1-800-342-3377 for free language assistance services regarding this press release.

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