PSC approves smaller rate increase for National Grid

The average residential National Grid customer won't face a rate increase on their electric delivery bills this year.

A Thursday vote by the New York State Public Service Commission (PSC) also gave the utility permission for an overall rate increase of about $113 million, which is based on allowing the company to earn a 9 percent return on equity.

A typical residential National Grid customer using 500 kilowatts of electricity per month pays about $51 per month for delivery of electric service.

The PSC also anticipates residential delivery rates will remain steady in 2012 and large commercial customers will see a rate reduction next year, PSC Chairman Garry Brown said in a news release.

"Commercial and industrial customers next year could see rate decreases of up to 50 percent," Brown said.

The commission avoided a rate increase in customers' electric-delivery bills this year by preventing National Grid from using rates to recover certain expenses until next year.

Those expenses include post-employment benefits, major storm restoration costs, and site investigation and remediation costs, the PSC said.

At the same time, the PSC allowed the utility to fully recover a charge extended as a part of National Grid's merger with Niagara Mohawk in 2002.

The $113 million increase approved by the PSC is substantially less than the $390 million sought by National Grid when it filed a petition a year ago. The commission determined that $113 million in revenues serves the reasonable needs of the company for this year.

The PSC decided to provide National Grid the chance to earn up to a 9.3 percent return on equity if the company commits to not filing for a general rate increase before Jan. 1, 2012.

If the company does not make that commitment, the return on equity will be set at 9.1 percent.