National Grid requests rate increase in Massachusetts - Worcester Telegram

National Grid requests rate increase in Massachusetts

Your National Grid electric bill could go up. Will it be sticker shock?

State regulators will decide if your electric bill will increase.
Henry Schwan

WORCESTER — You might see a modest bump in your electricity bill if the state approves National Grid’s plan to increase what it charges to send electricity to customers.

The investor-owned utility is Worcester's sole electricity supplier, and it filed the plan Friday with the state Department of Public Utilities to boost the distribution rate.

Review typically takes 10 months, and if National Grid gets the green light, some customers will see a $4.56 increase in their monthly bill. That represents an annual average increase of 2% over five years. Those likely impacted are residential customers using 600 kilowatts per month.

“Any increase in rates is an impact on customers, and we hope customers will see the value in (our company’s) investments," said Melissa Lavinson, National Grid’s head of corporate affairs in New England.

State officials will hold public hearings on the rate hike request. If approved, the change would take effect Oct. 1 next year, with new bills reflecting the rate increase starting Nov. 1. Electric utilities file a rate review at least every five years, and National Grid’s last filing was in 2018.

There's more to this plan

Besides the proposed rate increase, the company's Comprehensive Performance and Investment plan calls for investments over the next five years to "build the foundation for a clean energy future."

Efforts include replacing and upgrading substations, utility poles and electrical wires; adding new technologies to restore power faster after an outage; and digital programs to give customers easier access to information and bill management.

Plus preventing falling tree branches from damaging power lines by expanded trimming and "tree resistant" wires that can minimize impacts from falling limbs. Those investments are needed, said National Grid, since the average number of severe storms across the utility's service area has doubled over the past decade, from an average of four to 10 yearly.

Cutting energy bills for low-income customers is part of the plan. A new, tiered discount rate program that National Grid said is a first for Massachusetts would cut monthly electricity bills from 32% to 55%. Customers earning 60% of the state median income or less would be eligible for the tiered program. How much energy a customer uses also determines eligibility.

Currently, National Grid offers a 32% discount for income-eligible customers.

A second plan could also hike electricity bills

The utility is expected to file a second plan with the state in January to modernize the electricity grid as Massachusetts targets 2050 to achieve net zero carbon emissions statewide. No timeline was given for the review.

If the "Future Grid" plan is approved – at a total cost of $2 billion, according to a National Grid spokesman – the average customer would see $1.70 tacked on to their monthly bill. That amount is less than 1% of a typical monthly bill, according to utility officials, for a total increase of approximately 3% on an average annual basis from 2024-29.

All told, National Grid’s revenues would jump more than $150 million annually over five years if the state approves both requests: $110 million from the distribution rate hike and $44 million from grid modernization.

Beside electricity, National Grid distributes natural gas, and Lavinson said no funds from the proposed rate increases will be spent on the utility's gas infrastructure.

Why should ratepayers foot the bill?

When asked why customers have to pay for grid improvements, and not National Grid, company officials said the state's regulatory process governs how the industry works.

“We have to justify (to the state) our need to give safe, reliable services,” said Pamela Viapiano, vice president of regulation and pricing at National Grid. "We are a regulated monopoly, and we're allowed a fair return, and there is a cost to service. We make our case to the state Department of Public Utilities. They review it and if it's appropriate, then the rates take effect."

Some government funds do flow to National Grid to defray costs. Last month the U.S. Department of Energy awarded the utility $50 million for digital technologies to feed energy back into the grid from a variety of sources, including renewables. The energy department also selected National Grid to receive funds from the federal Bipartisan Infrastructure Law to transmit clean energy between New England and Canada.

Performance targets: Fines possible

Meanwhile, National Grid included self-imposed performance targets in its filings with the state. The utility faces fines if they're not met. Exceeding them could earn the company financial advantages.

One goal is boosting customer enrollment in the discount rate program by 5% yearly, according to a National Grid spokesman. Other targets include delivery of capital projects on time and on budget; adoption of clean energy requirements; reduction of greenhouse gas emissions; and customer engagement.

Contact Henry Schwan at henry.schwan@telegram.com. Follow him on X: @henrytelegram.