Friday, March 13, 2009

Groups Reply to PSC and Niagara Mohawk Defense of Gas Rate Case Settlement Proposal

In the NYS Public Service Commission proceeding examining National Grid’s request to raise natural gas rates in its Niagara Mohawk service territory, parties filed their responsive statements on March 10th to the February 13th Joint Proposal for settlement of the case. PULP and several community organizations are opposing the Joint Proposal. See Niagara Mohawk Gas Rate Proposal Fails to Address Low Income Customer Energy Burdens and Terminations.

Their March 10 reply comments refuted claims of the utility and Department of Public Service Staff that the Joint Proposal provides “much needed aid for low income customers,” when it only offers a $7.50 per month discount for Home Energy Assistance Plan (“HEAP”) recipients and HEAP-eligible customers. See Responsive Statement in Opposition to the Joint Proposal submitted by the Public Utility Law Project of New York, Inc. on behalf of itself and on behalf of intervenors the New York State Community Action Association, the Albany Community Action Partnership, United Tenants of Albany, and Syracuse United Neighbors.

Even with the $7.50 break, the minimum charge for low income customers would still amount to $9.95 a month. When compared to the minimum charges negotiated in 2007 for low income customers in National Grid’s Long Island and Brooklyn service territories – $1.88 and $3.53, respectively – the $9.95 is excessive. Stated another way, low-income residential gas customers in Long Island saw a 83.5 percent reduction and residential gas customers in Brooklyn saw a 73 percent reduction, while residential gas customers in National Grid’s upstate territories would see only a 32.36 percent reduction.

Moreover, low-income customers of the downstate National Grid affiliates receive a reduction in their volumetric delivery charges, while there is no break in the usage based part of the rates for Niagara Mohawk’s low-income customers. The proposed settlement rates also pale in comparison to the rates of National Grid affiliates in other states, such as Massachusetts, where state regulators have approved much more substantial rate reductions for low-income customers.

In 2008, more than 300,000 New York residential utility customers lost gas or electric service due to termination for unpaid bills, including approximately 24,000 Niagara Mohawk natural gas customers. In the context of more termination of service as a bill collection tactic, and in light of the PSC’s lightened approach known as “performance” regulation, PULP and the community groups sought performance standards that would work to reduce reliance on service termination as a means to boost collections. The settling parties, however, did not include any measure to do that in their Joint Proposal.

In their statements supporting the Joint Proposal, both Department of Public Service Staff and Niagara Mohawk avoided these concerns over affordability and disruption of service. Department of Public Service Staff stated that Niagara Mohawk’s proposed program “represents a well thought out and fair balance of the issues brought to the table by many of the interested parties, is sound and should be adopted in the context of the full JP.” In their reply, Staff adhered to this position.

Apparently the settling parties are confident that the New York Commission will tolerate continued harsh treatment of the poor.

A hearing on the Joint Proposal is scheduled for March 18th, after which the administrative law judge assigned to this case is expected to issue a recommendation to the Commission whether to approve, reject, or modify its provisions. A final order from the Commission would follow that.

Lou Manuta

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