National Grid on July 10 said that it has reduced its request for new April 2018 electricity and natural gas delivery prices by about $76m in a filing made with New York state regulators.
The changes are largely the result of updated forecasts for costs and interest rates that were included in the company’s April 28 filing, the company said, adding that the July 10 filing is a standard part of the rate case process.
If approved as amended, the proposal would result in total monthly bill impacts of $8.93, or 11% (17.5% on delivery), for a residential electricity customer using 600 kWh, the company said. The original April 28 filing for electricity service (600 kWh) was $11.23, a 13.9% increase, the company said.
Total monthly bill impacts for residential gas customers would be $8.70, or 12.5% (20.5% on delivery), based on 77 therms used, the company said. The original April 28 filing for gas service (77 therms) was $10.38, a 14.9% increase, the company said.
While regulations require the company to file a one-year plan, National Grid said that it hopes to phase in new rates through a multi-year agreement to mitigate customer impact. Spending the increase over three years, for example, could reduce total bill impacts to less than 5% annually, the company said, noting that its filing would impact only energy delivery prices; supply prices are set by the market.
If the New York State Public Service Commission (PSC) approves the rate request, it would take effect on April 1, 2018, the company said, adding that the current delivery price freeze for National Grid’s upstate electricity and natural gas customers remains in effect through March 31, 2018.
The most significant change in the July 10 filing results from updated calculations of future pension and other post-retirement benefit costs, National Grid said, noting that new studies have pegged those costs to be less than originally estimated in April.
National Grid said that its upstate New York customers have experienced more than a decade of stable energy bills. Adjusted for inflation, natural gas delivery prices have held steady and electricity delivery prices are lower than they were in 2004, the company said, adding that over that same period, it has invested more than $6bn in upgrading and expanding its delivery infrastructure.
New delivery prices would allow the company to modernize electricity and gas networks to further enhance reliability and resiliency, improve customer service, promote economic growth, and integrate new technologies that support the demands of a modern energy system, the company said.
National Grid noted that it has proposed a $2.7bn investment in its systems over the next three years, including programs specifically designed to address and respond to the increasing frequency and severity of storms that can affect customer service.
Among other things, the filing included updates to energy storage projects. Consistent with a March 9 PSC order, the company is proposing to implement two energy storage projects to increase the penetration of distributed energy resources (DER) and enable the company to learn more about the impact of DER on the electric system, the company said in its filing.
After an evaluation process that considered projects from the company’s non-wires alternatives list, the company selected two projects that will be deployed to test storage technology: the Kenmore Project and the East Pulaski Project. Both of those projects use a similarly sized energy storage system, estimated at 2 MW/3 MWh, and each project will evaluate different grid functions, the company added.
The Kenmore Project will test the use of energy storage to alleviate a supply constraint at the Kenmore substation, which is supplied by three sub-transmission cables that are forecast to surpass their normal-rated capacity in the near future, the company said. The energy storage system will be designed to supply energy at peak times to reduce the load carried by the sub-transmission system, allowing the company to defer installing additional sub-transmission capacity in the area, the company said.
The East Pulaski Project will test the use of energy storage to alleviate an “n-1” distribution constraint at the East Pulaski substation, the company said. If a failure occurs in the nearby local network, the substation may need to supply energy to an increased number of customers, resulting in the possibility of the substation surpassing its rated capacity and impacting reliability, the company said, noting that that condition has occurred, on average, about 2.5 times per year and lasted several hours for each occurrence.
The energy storage system being deployed will supply energy to the distribution system to reduce the peak load on the transformer during an abnormal condition, the company said. Because of forecast area load growth, the substation transformer is projected to exceed its peak capacity in 2020, National Grid said, adding that the project will help defer the need for future investment upgrades.
The updated costs for the two storage projects include a capital investment of about $4.6m in the Rate Year for each project (a total of about $9.3m) and O&M expense of $0.02m in Data Year 1 and Data Year 2 for each project (a total of $0.04m in each Data Year), the company said.
National Grid also noted in its filing that it plans to increase its capital spend in FY18 by about $6.9m in distribution and $2m in sub-transmission. That increased investment is aimed at addressing near-term investment needs on the distribution and sub-transmission systems prior to the start of the Rate Year, the company said, adding that the affected distribution projects include the Rotterdam 13852 and 13853 relocation, while the affected sub-transmission projects include the Mallory-Cicero 33 34.5-kV relocation.