Letter to Chairman Garry A. Brown, New York State Public Service Commission
Letter
Schumer Urges Public Service Commission to Reject Proposed National Grid Rate Hikes - Strapped Consumers Already Paying Some of the Highest Rates in Country
In Light of National Grid's Plan To Request A Rate Hike That Would Increase Rates for Electric and Natural Gas Consumers, Schumer Urges NY Public Service Commission to Reject Any Rate Increase
National Grid Recently Announced 25% Increase in Profits, 2 Million Upstate NYers Already Pay Some of Highest Rates in Country
Schumer: Regulators Must Stop National Grid's Rate Increase Proposal In Its Tracks
U.S. Senator Charles E. Schumer today called on the New York State Public Service Commission (PSC) to reject any form of delivery rate hike requested by National Grid Power. Yesterday, executives at National Grid announced they would be seeking a rate hike for their electric and natural gas consumers in Upstate New York in 2012, on the same day that they announced pre-tax profits had risen 25%. Schumer is asking the PSC to swiftly reject the future proposal, as New Yorkers currently pay some of the highest electricity and gas rates in the nation.
"For almost a decade, electricity prices far above the national average have been a burden to ratepayers and a yoke around the neck of economic development efforts in upstate New York so this proposal must be stopped in its tracks," said Schumer. "The Public Service Commission must send a loud and clear message to National Grid, and squash even the thought of another round of rate hikes in New York."
According to media reports, National Grid executives announced plans to request a tax rate hike request for their Upstate New York territory in 2012. The Public Service Commission already approved a $119 million rate increase for the utility's upstate business in January, which National Grid claim was inadequate. The company plans to submit its proposal "as soon as practicable in 2012." Schumer urges the PSC to reject any rate increases for upstate New York electric and gas consumers, who already pay some of the highest rates in the country.
Schumer points out that National Grid's electric prices are among the highest in the nation, especially in upstate New York. The existing high gas and electricity rates are already a major hindrance when trying to attract or expand businesses -- especially ones that require a great deal of power -- throughout New York. What is more, Schumer notes that in the same meeting, National Grid executives announced a 25% increase in its pre-tax profit.
Schumer noted the repeated instances in which National Grid's rates have been inappropriately high and negatively impacted New York. In 2010, Schumer called for an investigation into initial reports that showed that the company was billing Upstate rate payers for a variety of inappropriate items, such as shipping fees for an executive's wine collection, another executive's washing machine repair and private school tuition for yet another executive's kids. This investigation came in the midst of yet another rate hike request, and PSC committed to investigating the report. In 2008, according to the Department of Energy, residential rates were 37% higher than the national average and commercial rates were over 60% higher. In 2002, National Grid took over Niagara Mohawk Power Corporation and assumed responsibility for Niagara's debt. Since then, New Yorkers have paid a "competitive transition charge" to finance this debt, which is scheduled to be paid down in 2011. For families forced to shoulder the burden of this debt through higher utility bills, the year 2011 was to mark a significant decrease in their electricity payments. Unfortunately, National Grid has applied for a 20% percent delivery rate increase beginning in 2011, meaning residents will receive no relief in their utility bills.
The full text of Senator Schumer's letter to Chairman Brown appears below:
Chairman Garry A. Brown
New York State Public Service Commission
Empire State Plaza
Agency Building 3
Albany, NY 12223-1350
Dear Chairman Brown,
I write to express my concerns regarding National Grid's recent statement of intent to request, yet another, rate increase. This request comes on the heels of National grid boasting a 25 percent increase in its pre--tax profits and months after the Public Service Commission (PSC) having approved a rate increase. I would further urge you to reject any request for electric rate changes proposed by National Grid deliver rate relief to customers who were required to pay unusually high utility costs to cover debt that was incurred by National Grid when it purchased Niagara Mohawk Power Corporation.
While I am gratified the PSC consistent vigilance on behalf of New York consumers, having investigated National Grids past questionable accounting, this recent indication of a further rate increase is troubling and should be denied. In December 2001, National Grid was authorized to take over Niagara Mohawk Power Corp. (Case 01-M-0075) and assumed responsibility for Niagara's debt. Over the past eleven years, New Yorkers have paid a "competitive transition charge" totaling $4.8 billion to finance this debt. For families forced to shoulder the burden of this debt through higher utility bills, this year was to mark a significant decrease in their electricity payments. Unfortunately, National Grid has already been $119 million increase this year and has now sought a further increase, meaning residents will receive no relief in their utility bills, despite assurances from the company that the increase will be offset by extending the amortization schedule for the competitive transition charge.
National Grid provides electrical and natural gas service to over two million customers in Upstate New York, making New York State residents National Grid USA's largest customer base. New York families served by National Grid should not be see their rates skyrocket at a time when rising utility costs are stretching family budgets to the brink.
I urge you to deny any requests to change rates until National Grid fulfills its commitment to its customer and reduce rates, as originally intended under the Commission's order approving the merger. Thank you for your attention to this important request. If you have any questions, please do not hesitate to contact me.
Sincerely
Charles E. Schumer
United States Senator
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