Projo Biz Blog

National Grid has proposed an even bigger decrease in natural gas rates because of falling energy prices.

The utility company's proposal would lower the bill of a typical residential customer by about $11 a month, or 8.3 percent, according to a filing the company made to the Public Utilities Commission on Oct. 31.

The bigger decrease reflects a drop in the price of natural gas futures of about 12 percent over the past two months, according to figures from the Energy Information Administration, part of the U.S. Department of Energy.

The company's calculation is based on the consumption of 860 therms over an 11-month period, beginning Dec. 1.

A previous filing, made in September, proposed a rate decrease of about $6 a month, or about 4.6 percent.

However, customers may not see much of a decrease in their bills because of a separate proceeding in which National Grid is seeking to raise distribution rates by about 5 percent.

Those charges, which are separate from those for the gas itself, cover the company's cost of operating and maintaining the gas distribution network.

In that proceeding, National Grid said it wants to raise rates by $18.7 million annually, in order to speed up replacement of aging gas lines and to create a discount for low-income customers. National Grid is also seeking changes in the natural gas rate structure to protect itself from revenue losses that result from the conservation efforts of its customers.

The distribution rate has not been raised in 10 years.

The Division of Public Utilities and Carriers, the agency that represents ratepayers in utilities cases, has argued for a lower distribution rate increase -- $8.7 million.

The PUC has already held extensive hearings on the distribution rate proposals. The commission is expected to make a decision on the proposed increase and the decrease by Nov. 30.

The new rates would go into effect on Dec. 1.

As for electricity rates, National Grid said it plans on proposing new rates in the middle of November.

Those rates are likely to reflect a decrease in energy costs, but also an increase in transmission costs.

Electricity rates have remained unchanged since they were raised by 21.7 percent in July.

---