National Grid's electric and natural gas customers across Upstate New York will begin to see the impact of reduced delivery prices this month as a recently approved, multi-year rate plan went into effect April 1. The new rates will help reduce electric bills and hold natural gas rates steady for the next three years.
This is the second straight year that electricity delivery costs declined, following a cut in January 2012 of as much as 10 percent for residential users.
The new rate plan, recently approved by the New York State Public Service Commission, will reduce energy deliver costs for the next 12 months, followed by modest increases in the second and third years of the plan. For electricity customers, delivery bills in March 2016 will be lower than they are today assuming equal usage. Gas delivery rates also are declining starting this month, with modest increases in years two and three of the plan that would result in delivery prices rising at less than the expected rate of inflation.
Starting this month, the typical residential electric delivery bill will decrease by more than 10 percent, or more than $5 per month. Commercial and industrial customers also are experiencing delivery reductions, ranging from 4 to 11 percent depending on service type.
Typical residential gas heating customers will see the delivery portion of their bills go down about 9.5 percent, or about $4.14 per month, during the first year of the rate plan.
National Grid does not control the cost of the energy itself and simply passes that through to customers. Market conditions for both electricity and natural gas fluctuate daily, although prices for both have been at or near historic lows for a number of years.
Looked at over time, the delivery portion of a residential electric customer bill in 2011 was about $60. That will drop to $47 per month this year, and rise only slightly to $51 in 2015. For a typical residential gas heating customer, gas delivery in 2011 was about $45 per month, will drop to $39 this year, and will rise only back to $45 in 2015.
"This is good news for customers, as stable rates allow our consumers to better plan their energy budget," said Ken Daly, National Grid president, New York.
"In addition, this plan expands low-income programs for those in need, and continues economic development programs that help us invest in the communities we serve."
The rate agreement also calls for the company to investigate expansion of natural gas service in Upstate New York to enable customers to take advantage of historically low natural gas commodity costs that have remained stable for the past several years. In addition, the company will continue to invest in its electric and gas networks through a $1.6 billion capital program to enhance service and improve reliability.
National Grid serves more than 1.6 million customers across Upstate New York.