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National Grid customers in NY would see $30 higher monthly bills under proposed rate hike

Two million National Grid customers in New York City and Long Island could see their monthly bills increase by roughly $30 under a rate hike proposed by the utility company.

The multibillion-dollar international utility said it needs the money to comply with federal and state safety mandates and climate laws. The state’s Public Service Commission, which regulates utilities, is reviewing National Grid’s proposed hike and will determine how much rates will go up and how they will be phased in. National Grid’s proposal would result in a 17% increase in local revenue.

Customers and environmental groups said that’s too much money to invest in a system that should be phased out. The state’s Climate Leadership and Community Protection Act sets a 2040 deadline to completely transition the grid to emissions-free energy sources.

“It’s an incredible rate hike,” said Kim Fraczek, director of the environmental group Sane Energy Project. “They’re asking for an astronomical amount of money from us to continue infrastructure that will be burning gas into the 2080s. We also can’t afford that financially. And we can’t afford that for our climate.”

Last year, the natural gas provider received approval on rate hikes for upstate customers over the next three years. The increases, which National Grid justified by citing the cost of compliance with climate laws, add up to around a couple of dollars more per month. In 2021, the utility also was approved for a rate hike for the controversial Brooklyn pipeline, which resulted in a $5 monthly increase for Brooklyn customers.

“Our rate proposal includes an array of critical investments that will allow us to meet New York’s clean energy goals while continuing to build a more reliable and safer energy system that all our customers can depend on,” National Grid spokesperson Karen Young said via email.

If approved, the rate hike would be phased in over a three- or four-year period. National Grid said it will use the funds to electrify its vehicle fleet, offer more support for low- and moderate-income homes, and repair leaks in the current system.

Nearly 80% of New York City’s power comes from natural gas, but state climate laws mandate that municipal power sources not exceed 30% from fossil fuels sources by the end of the decade.

“These are very large rate increases and they are driven by capital costs in traditional gas system infrastructure, much of which runs counter to achieving our state’s climate law and clean energy objectives,” said Christopher Casey, an attorney with the National Resources Defense Council.

National Grid said it will use the additional revenue to repair its natural gas pipelines, which are notorious for leaking. Nationwide, the leak rate is just over 2%, which is equal to 13 million metric tons of methane pumped annually into the atmosphere. That represents a $2 billion loss – and enough natural gas to power 10 million homes for a full year.

But Casey said utilities use leak repairs to justify fortifying systems that should be disabled in the coming decades.

“To go out and proactively replace functional pipe at the pace and expense that National Grid wants to do, I don’t think can be fully justified purely for safety and reliability reasons,” Casey said. “The idea that they have to make the level of expenditures to make replacements in this traditional gas infrastructure that we know needs to go away is not justified.”

While leaks pose hazards to health, climate, safety and reliability that must be addressed, fixing them isn’t a fulfillment of the state’s climate laws, which ultimately seek to do away with the natural gas sector.

“Gas utilities across the country have used the leak issue as an excuse to make large investments in infrastructure that they call climate friendly,” said lawyer Raya Salter, a state-appointed member of the Climate Action Council.

The proposed rate hike allows for preparing the pipeline system to deliver renewable natural gas, a form of fuel made from organic waste such as food scraps and livestock excrement. But that type of natural gas creates just as much carbon emissions as traditional natural gas.

The Community Leadership and Community Protection Act’s scoping plan does not recommend renewable natural gas or hydrogen as alternatives to electrification.

Representatives for Gov. Kathy Hochul, who appoints a majority of members of the Public Service Commission, did not respond to an inquiry concerning its position on the proposed hike. A decision is expected early next year. If approved, it will go into effect in April.

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