Friday, June 25, 2010

National Grid Proposes Applying Additional $ to its Low Income Program for its New York City Natural Gas Customers

In its most recent rate case, National Grid agreed to expand its low income rates for its gas customers in Brooklyn served by KEDNY. Residential non-heating customers now receive a $2.50 monthly discount in the minimum charge and heating customers are offered a $9.50 discount. There is also a seasonal winter discount which provides an additional 45% savings off of the second rate block for heating customers. The rate plan set a 60,000 customer enrollment target.

Because it took about a year to ramp up to the 60,000 level (the company currently now has over 61,000 customers enrolled), more than $2.5 million accumulated in KEDNY’s Low Income Discount Program Balancing Account. The New York State Public Service Commission (“PSC”) December 21, 2007 decision authorizing the rate package noted that should the Balancing Account have a positive balance at the end of 2009, then National Grid or any other party could propose how the funds should be used. In a Petition filed with the PSC on June 22nd, the company proposed to enhance its current low income program by continuing to enroll customers beyond the 60,000 target. National Grid believes that with the fund balance, the program could support up to 70,000 low income customers for the remaining years of the rate plan.

The next step in this process is for the PSC to put National Grid’s proposal out for comment.

PULP agrees that this would be the best use of the funds. That said, the 60,000 customer enrollment target may have been set artificially low, especially with the economic crisis that followed the implementation of the rate plan. When National Grid/KEDNY applies for its next rate case, a more thorough examination of the number of eligible customers should be completed.

Lou Manuta

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