Electric bills to go down 6% in 2012 for most National Grid residential customers
Thursday, December 15, 2011 - 5:16 pm

Electric bills will go down in 2012 for most National Grid customers in upstate New York following a decision today from the state Public Service Commission (PSC).

The typical residential customer bill will be 6 percent lower overall, assuming equal usage.

Small to mid-sized commercial accounts would see overall bill reductions ranging from 4 to 11 percent. Large commercial and industrial accounts would see total bills drop by as much as 13 to 23 percent, depending on type of account. The changes authorized today by the PSC will take effect Jan. 1.

Today’s decision ends the collection of approximately $573 million in competitive transition charges (CTC) on Dec. 31. The CTCs began in 2001 to collect historical costs associated with the company’s transition to competitive deregulated supply markets.

Today’s decision also allows the recovery of approximately $236 million in past costs through a temporary charge over the next 15 months. The net result is an overall reduction in delivery bills for all customer classifications, and continued rate stability for at least that period.

National Grid filed its plans for elimination of the CTC and recovery of deferred expenses in late July. The deferred expenses -- extraordinary storm costs, pensions, tax or regulatory changes, environmental costs and others -- were incurred over the last ten years but were set aside for later recovery.

The deferred costs also include the company's commitment to invest nearly $1.5 billion on electric transmission and distributions systems in upstate New York. The five-year commitment was completed ahead of schedule earlier this year, and has helped the company improve delivery service quality as much as 12 percent year over year. The overall spending was at levels well beyond what has been included in previous rates, with the expectation that certain costs would be deferred for later recovery.

According to National Grid, average residential delivery bills will drop 11 percent and the total bill will be 6 percent less; small commercial and industrial users will see delivery rates go down 9 to 21 percent with the total bill dropping 4 to 14 percent; and large commercial and industrial users will experience a 39 to 44 percent decrease for delivery and a 13 to 23 percent reduction for the total bill.