While tax reform has already reduced operating costs for National Grid, prompting the company to reconsider its request to increase base distribution rates, the increases are still too much for those appearing before the Public Utilities Commission Thursday night.
The sixth hearing for public comment on the company’s request, held at PUC offices on Jefferson Boulevard, also raised questions over National Grid’s handling of power restoration of the March 2 windstorm that left 150,000 customers without power, some of them for more than three days.
Gael Taddeo of Chepachet told how the Pascoag Utility, which supplies electricity to about 5,000 customers, not only have lower rates than Grid but experienced only about 100 outages during the storm. He questioned why a small utility company could do a better job, suggesting that Grid employ some of their best business practices, such as a scheduled replacement of equipment and trimming of trees near wires used by Pascoag.
“I don’t know why they’re a monopoly,” he said of Grid.
In her opening comments Raquel Webster, senior counsel for Narragansett Electric that is doing business as National Grid, said the company’s base distribution rates for electricity and gas have remained unchanged since 2013.
“This proposal will allow us to continue to operate the electric and gas distribution systems on a safe and reliable basis for customers; maintain a qualified and dedicated workforce; meet the changing needs and expectations of our customers and the communities we serve; and provide increased support for our income eligible customers,” she said.
Webster addressed recent federal tax cuts, saying the company’s request filed in November to raise $71 million was being reduced to raise $45 million.
The initial proposal – prior to tax reform – proposed a monthly increase of 6 percent for residential electric customers (approximately $6.60/month) and an annual increase of 5 percent for residential gas customers (approximately $65/year), according to National Grid.
“We will finalize our analysis and update our rate proposal currently before the PUC to pass the benefits of these tax reductions through to customers in the rates that will go into effect in September 2018. Although we do not yet have available the impact of this proposed reduction on customers’ bills, we expect smaller rate impacts than originally proposed in our November filing, which was six to seven percent for residential customers,” she said.
A PUC pre-hearing conference on the rate request is scheduled for June 7 followed by the first of multiple evidentiary hearings starting June 12.
Lt. Governor Daniel McKee and Rep. Kenneth Marshall, who both testified, were looking for more. McKee has requested for an immediate reduction in rates to reflect the reduction in the federal tax rate from 35 to 21 percent. He asked for a recalculation of rates as of Jan. 1.
“We should not be asking for rate returns,” said Marshall, “they [Grid] should be offering them.”
Marshall said the revenues generated by the reduction in taxes should be set aside to reduce future rate increases and fund programs to assist low income and fixed income customers.
In response to the question of how Grid planned to address the reduction in taxes, spokesman Ted Kresse released the following statement on Friday: “We're committed to ensuring the tax savings are fully realized and used to benefit our customers. We have already shown that by reducing our initial base distribution request by $25 million this past January. As you know, any rate changes need to be made through formal proceedings. As the PUC continues its thorough review of our base distribution rate adjustment, we will continue to work with them to ensure the tax savings are fully realized and used to benefit our customers.”
Jack Reinholt, chair of the Senior Agenda Coalition of Rhode Island, urged that the PUC consider the state’s aging population and its ability to afford utility rate increases. He said that of the state’s 167,000 senior citizens, 36,000 are living in poverty.
Pam Jennings of the George Wiley Center said she works with many people on supplemental assistance, urging the commission “to do everything in your power to protect those most vulnerable.” She pointed out that an increase in utility rates can be the difference between keeping the lights on and taking medication for some low income people. Jennings suggested a percent of income payment plan that was applauded by many of the 35 people in attendance.
“We don’t want to move and go somewhere else,” Edwin Rivera told the commission. Rivera, who described himself as a hip-hop teacher, asked why the state should put more money in the pockets of National Grid and not Rhode Islanders.
“You don’t care about our jobs,” he said, pointing to National Grid representatives in the audience. “You don’t want to hear my complaint.”