New Hampshire regulators have suspended National Grid USA’s proposed tariff pending an investigation into whether the company has appropriately accounted for the costs of its reliability enhancement plan (REP) and vegetation management plan (VMP).
Granite State Electric d/b/a National Grid, which is a subsidiary of National Grid plc, on May 15 filed the results of its REP and VMP for FY12, under the terms of a settlement agreement regarding the National Grid/KeySpan merger.
The filing raised issues related to whether it conforms to the requirements of the 2007 merger settlement agreement and whether the resulting rates are just and reasonable, the state Public Utilities Commission (PUC) added in its June 1 order.
National Grid said impacts for a residential default service customer using 500 kWh per month would be a bill increase of 0.3%, or a monthly bill increase of 21 cents, from $60.33 to $60.54. For residential default service customers using 661 kWh per month, which, according to the company is the average monthly usage for the 12 months ended in April, the bill increase would be 27 cents, or 0.3%, from $80.44 to $80.71. For other customers, bill increases would range from 0.3% to 0.5%.
The PUC also said that National Grid’s filing contained:
- A report on actual spending on REP and VMP operation and maintenance (O&M) and REP capital investment for FY12, including an explanation of the differences between the actual amounts and the budgeted amounts reviewed by staff.
- A request to refund customers $295,207, consisting of vegetation management reimbursements of $402,693 from FairPoint Communications reduced by $107,486, the amount of O&M spending in excess of the base amount of $1.36m.
- An incremental revenue requirement credit of $18,005 associated with REP capital investment of $398,239.
- A summary of reliability performance for FY12.
Under the settlement agreement, National Grid provides a REP and VMP O&M budget to staff that assumes spending for each fiscal year that is about equal to the base plan O&M amount of $1.36m. The company submitted an O&M budget for FY12 of about $1.56m, or $196,000 more than the base plan amount, for which staff expressed its support, the PUC added.
National Grid said its actual spending on REP and VMP O&M activities for FY12 was about $1.47m, or $88,514 less than the filed budgeted amount of about $1.56m.
The spending variance for VMP and O&M activities is the result of bid prices for cycle pruning being lower than expected, resulting in lower than forecast unit prices, and the company spending less than anticipated for spot tree trimming, trouble and restoration calls and interim trimming due to lower demand for those activities.
National Grid also said in its filing that the cost of police details for cycle pruning exceeded the anticipated spending levels. Furthermore, it spent $131,267 in O&M costs associated with the REP program, or $34,267 more than the proposed budget of $97,000. This increase, according to National Grid, was driven by the greater than forecast amount of equipment needing maintenance or repair in the feeder hardening program, a component of the REP that involves improving the performance of the worst performing circuits through equipment replacements, installations or upgrades.
The PUC also said that National Grid requested the incremental revenue requirement credit of $18,005 associated with REP capital investment of $398,239.
Partially offsetting the FY12 spending is the $402,693 in reimbursements from FairPoint related to its share of vegetation management expenses initially incurred by National Grid and then billed to FairPoint. The PUC added that National Grid proposed to refund customers $295,207, the amount of reimbursements received from FairPoint reduced by $107,486, the amount of FY12 O&M spending in excess of the base amount of $1.36m.
The PUC said a hearing will be held on the matter on June 14.