National Grid and US regulator plan three-year utility price hike

Multinational electricity and gas utility National Grid has submitted a revised three-year price and investment plan to the New York US public utilities regulator for its KeySpan gas distribution arms in New York (KEDNY) and Long Island (KEDLI).

The proposal would increase revenue for National Grid over three years with a 9% return on equity and an investment of $3bn to modernise gas infrastructure and enhance safety.

A final decision from the US regulator is expected in late 2016 and the new rates would become effective from January 2017.

The FTSE 100 company said price hikes for customers would be evenly phased across the three years, with a smaller increase in the first year and higher increases in the subsequent two years.

There was an initial rate case filing in January for a one-year rate plan, however it was revised and the new three-year joint proposal was filed, in order to phase-in customer bill impacts over three years.

KEDNY’s revenues are expected to increase by $272m in 2017, in comparison to National Grid's initial request of $331m, after including $86m for site investigation and remediation and other costs. For 2018 year-on-year revenue increases would be $41m and for 2019, $49m.

KEDLI’s revenues are also expected to increase by $112m in 2017, short of an initial request for $180m, after including $38m for site investigation and remediation and other costs. For 2018 year-on-year revenue increases would be $20m and $27m for 2019.