Projo Biz Blog

National Grid has resolved a series of disputes over how much it owes its biggest electricity supplier, but the resolution is going to mean a rate hike for the utility company's Rhode Island customers.

The deal reached between National Grid, a state agency that represents ratepayers, and Constellation Energy of Baltimore, calls for National Grid to make payments to Constellation next year that total $50.2 million. And under the agreement, ratepayers will pick up the tab.

The Public Utilities Commission, which on Tuesday voted 3-0 to approve the agreement, will decide how to assess customers the $50.2 million. If it decides that all the money should be collected in one year, it would mean a rate increase of $3.95 a month, or 4.2 percent, for a typical customer that uses 500 kilowatt-hours of electricity each month.

Electricity rates are already at an all-time high. In July, National Grid increased electricity rates by 21.7 percent. A typical customer now pays $93.44 a month for electricity, according to the company.

National Grid said that although customers are facing another rate increase, they are far better off than they would be if the company lost the disputes in court. The company, and therefore its customers, could have been required to pay $300 million or more if Constellation won the pending lawsuits, said Ronald T. Gerwatowski, deputy general counsel for National Grid USA.

"The way we came out of this settlement is good news for customers, when you consider the potential liability that was hanging over our heads," he said in an interview this afternoon.

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