SYRACUSE — National Grid has asked state regulators for rate increases that would boost energy bills for local households by 15% for electricity and 20% for natural gas. The proposal would add $440 a year to the bill for a typical household using both electricity and gas.
The requested increases, which would take effect next year if the Public Service Commission approves them, far exceed anything the utility has asked for in recent decades.
But National Grid’s proposal today follows a similar pattern of unprecedented, double-digit rate hikes sought by other New York utilities in recent months, including big rate hikes sought by National Grid’s downstate natural gas businesses.
In its Upstate service territory, National Grid has about 1.7 million electric customers and 640,000 natural gas customers from Albany to Buffalo.
For a variety of reasons — inflation, higher interest costs, and the need to replace aging equipment, among others — utilities are seeking rate increases much larger than anything in recent memory.
Consumer advocates say the trend is ominous, especially since a significant number of customers already can’t afford the bills.
Some 16% of Upstate residential customers and 7% of commercial customers are more than 60 days in arrears, according to data reported by National Grid. More than 6,600 customers were terminated for non-payment in April.
“I mean, it’s one of these things that we’re really worried isn’t going to stop,’’ said Laurie Wheelock, executive director of Public Utility Law Project, a group that represents low-income utility customers.
Low-income customers who qualify for utility discounts would see smaller bill increases, National Grid officials said. For example, a low-income household with both electricity and gas would pay about $108 a year more, rather than $440.
Utility officials say the rate increases are necessary to maintain a safe and reliable system.
Utility rates have been relatively stable for more than a decade. Adjusted for inflation, National Grid electric bills are 20% lower now than in 2007, and gas bills are 40% lower, the utility reports. That’s due in large part to low natural gas commodity costs, which also have helped keep electric power prices in check.
National Grid’s last Upstate rate plan, which started in 2021, raised average household electric rates gradually over three years, by a total of about $6 a month. Over the same period, natural gas rates increased about $6.45 a month.
By contrast, the current proposal would increase total household electric bills by $19 a month — or 15% — assuming average usage of 625 kilowatt-hours. The total bill for natural gas would rise $18 a month for a customer averaging 78 therms a month. That’s a 20% hike.
But this won’t be the final word. The Public Service Commission typically seeks to whittle down requested rate increases. If this case follows the norm, the commission’s staff along with other agencies and interest groups will try to negotiate a multi-year deal to spread out the rate increases over a longer period. Ultimately, any increase will be voted on by the six-member PSC.
National Grid hopes to negotiate a multi-year deal, said Phil DeCicco, the utility’s New York general counsel. That would spread out the bill increases over several years and help the utility do more long-range planning, he said.
The commission controls utility delivery rates, which cover the cost of manpower and maintenance on the energy distribution networks. The commodity prices for gas and electricity, on the other hand, are determined by unregulated wholesale markets and are passed on to utility customers without markup.
Some of the rate deals approved recently have been costly for consumers, even if they are less than what utilities asked for.
New York State Electric & Gas, for example, which serves a small slice of western Onondaga County along with other Upstate areas, started a new three-year rate plan last November. Residential electric rates have already increased nearly $19 a month, on average, and will go up another $11.35 next year. All told, the rates will increase more than 30% in slightly less than three years.
In addition, NYSEG’s natural gas rates will go up on average about $11 a month over three years, or 8%.
Some energy officials are worried that costs are getting out of hand.
State law requires the PSC to set utility rates that are “just and reasonable.’’ When the PSC approved the NYSEG deal, Commissioner John Howard called it “reasonable … but maybe not just.”
In New York City and Long Island, National Grid is awaiting PSC approval for negotiated three-year plans that would increase natural gas rates roughly 17% the first year, 7% the second year, and more than 9% the third year.
The rate hike proposal today calls for investing $1.7 billion in the Upstate electricity grid and $338 million in the natural gas network. Those investments will help create a “smarter, stronger, cleaner energy system that will enhance reliability and advance New York’s clean energy goals,’’ the company said in a news release.
By investing in the system, the utility will reduce emissions and improve the ability to connect renewable energy projects to the network, among other goals, utility officials said.