National Grid seeks 13.7% decrease in electricity rates
6:09 PM Tue, Nov 18, 2008 | Permalink
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Rhode Islanders should finally get some relief on their electricity bills. National Grid has proposed reducing rates by about 13.7 percent as of Jan. 1, trimming almost $13 a month from the bill of a typical customer.  The annual electric bill, in dollars, of a National Grid customer who uses 500 kilowatt-hours of electricity per month. If the PUC approves the proposed decrease, a typical customer would pay $967 a year for electricity in 2009, compared to $1,121 this year. Source: Journal calculations, National Grid The requested decrease is the first change in rates since an unprecedented rate increase of 21.7 percent in July. The proposal, which was part of a 255-page filing made to the state Public Utilities Commission on Friday, reflects the steep decline in the cost of crude oil and natural gas that has occurred over the past four months. Crude oil futures are down 62 percent from its record high set in July, and is at its lowest price in almost two years; natural gas futures have fallen about 53 percent during the same period. Though very little electricity is produced by oil in New England, many of National Grid's long-term contracts with suppliers require them to pay extra for power if the market prices of natural gas or crude oil rise above a certain trigger point. National Grid is Rhode Island's dominant utility company, providing electricity service to 477,000 customers in 38 communities and natural gas to about 245,000 customers in 33 communities. The filing is National Grid's annual reconciliation report in which the company "trues-up" its expenses with the money it received from customers during the previous 12 months. After taking those figures into account, the company projects its cost to buy power for its customers in 2009, and proposes a new rate to match those projections. If the PUC adopts the proposal without change, a typical customer who uses 500 kilowatt hours of electricity per month will pay $80.60 each month, compared to the current charge of $93.44 a month. The current rate for power went into effect on July 15, a time when energy prices were at their peak. (National gas rates may decline as well, depending on the outcome of two proceedings now before the PUC. National Grid has proposed lowering the rate for the natural gas itself, but also wants to raise delivery charges, in part, to speed up the replacement of aging gas mains. The PUC is expected to decide both issues by Nov. 30, with the new gas rates going into effect on Dec. 1.) The new electricity rate proposed by National Grid reflects a substantial decrease in its projected cost to buy electricity, offset by a smaller, but relatively high increase in its transmission charges. Specifically, National Grid wants to lower the standard offer rate to 9.5 cents per kilowatt-hour, a decrease of 2.9 cents from the current rate of 12.4 cents per kilowatt-hour. That rate represents the cost of the electricity itself and is passed on to customers without markup. National Grid does not profit from the standard offer rate. That change alone would cut $14.50 a month off a typical customer's bill. But the company said it needs to increase total transmission charges to 1.5 cents per kilowatt-hour from the current rate of about 0.98 cents per kilowatt-hour, a 56 percent increase. So, the net decrease comes to $13 per month for a typical customer. 
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Still, it means rates will still be up by a little over 10%. And National Grid as they are wont to do will then cry to the PUC about revenue protection.
I say regulate the hell out of National Grid. Remember when RI had three or four electric companies? It worked well enough then.
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wow they got 21 increase we get back 13 then we give another increase,
the best thing that could happen would be if the people got to elect who sits on the PUC board,
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can someone tell me how they can justify keeping the rate where it is? they raise it 21% or so when oil was 130$ a barrel and coal was around 200$ a ton. oil is now down to 45$ a barrel and coal is down to 75-80$ a ton. both have dropped more than 50%, if they go by there cost of production the rate should drop at least to where it was. or how about the puc telling them to drop it according to there production cost which would be a 50% decrease. which is drastic but so is the economy. someone is making bails of money at our expence its time for the comunity to be more involved.
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