Posts Tagged ‘National Grid’

Thursday, October 21, 2010

Commentary: National Grid Rates A Shambles

Earlier this year, I published a piece on a state Public Service Commission (PSC) investigation into National Grid’s sketchy finances.

The monopoly power deliverer stood accused by the PSC of charging its Upstate New York electric customers for computers in New England, software licenses on Long Island and other corporate costs that have nothing to do with Upstate utility operations.

A recent Post-Standard article added further tidbits uncovered during the PSC investigation: $1,254 for a National Grid executive to ship his wine collection across the Atlantic, $3,566 to repair another executive’s washing machine and pool cover on Long Island, and $35,700 to send a third employee’s children to a private school in Boston.

However, the Syracuse paper reported that the PSC will be forced to decide on National Grid’s proposed $400 million hike to its already sky-high rates long before the audit is complete. The PSC chairman told a senate committee that state law requires the commission to vote on the proposal within 11 months of its submission.

The president of National Grid USA said the rate hike is needed because much of the utility’s infrastructure is half a century or more old. Power bills have skyrocketed since its purchase of the former Niagara Mohawk, a purchase, it was promised at the time, would be wonderful for rate payers thanks to consolidation efficiencies. It begs the question: where has the money gone?

The multinational wants an 11.1 percent annual profit margin, while the PSC contends the rate should be ‘only’ 9 percent.

New Yorkers still pay the highest power bills in the nation. This fiasco may give some insight why.


Monday, July 26, 2010

PSC: National Grid’s Rates Should Come Down

Earlier this year, I published a piece arguing that the National Grid power company gouges upstate New Yorkers.

A piece in The Post-Standard offers some fresh evidence in that regard.

The Syracuse daily reports that the monopoly power deliverer is charging its Upstate New York electric customers for computers in New England, software licenses on Long Island and other corporate costs that have nothing to do with Upstate utility operations, auditors at the state Public Service Commission (PSC) say.

PSC investigators came across this information while looking at the multinational’s plan to raise electric rates on New Yorkers by $369 million a year, including $25 million a year in bonuses (apparently without any requirement that the employees reduce costs to pay for them).

So questionable are the power company’s procedures that PSC auditors concluded: “Transactions between the former Niagara Mohawk and other companies owned by National Grid are so loosely documented that Upstate utility customers likely are subsidizing other parts of National Grid’s business.”

The paper reported that in recent years, National Grid has justified purchasing several other utilities by arguing that the company would save money via efficiencies and consolidation. But PSC staff noted that such the cost of the shared services actually increased, far higher than the rate of inflation.

A PSC panel said the company’s plan to raise rates had “a number of serious problems” and had so many objections that it actually recommended National Grid DECREASE rates by $14 million a year.


Tuesday, March 9, 2010

Commentary: National Grid Gouges Adirondackers

What would happen if a pizzeria tacked on a $50 delivery charge to a $15 pizza? It would go out of business faster than you can snap your fingers. That’s because pizzerias are subject to competition. National Grid power company can get away with such outrageous billing practices because it has no competition in the energy delivery business.

While New York state has legalized competition in the energy supply market, National Grid remains the monopoly energy deliverer in the areas it serves, which includes much of the Adirondacks.

You can buy energy from another provider but it’s still delivered via National Grid power lines, and the British-based conglomerate milks this distinction for all it’s worth.

National Grid’s bill includes two major charges: supply cost and delivery cost. The supply costs (the part the ordinary consumer can control) are typically reasonable. The delivery costs (the part the consumer can’t control) are invariably outrageous.

Last December, I used $41.14 worth of electricity, but they charged me $84.76 to deliver it.

Last September, I used a mere $9.45 worth of electricity. My reward for such energy efficiency was a whopping $33.08 delivery charge.

In what world is the delivery charge for a product three and a half times more than the actual value of the product?

National Grid is nominally regulated by the state’s Public Service Commission- though gouging like this makes you wonder how much regulation is actually going on.

National Grid has claimed that sky-high delivery charges are designed to ‘stabilize’ rates. Yet even in February, invariably my highest energy usage month, delivery charges were still higher than supply charges.

These dubious billing practices have no doubt padded the conglomerate’s bottom line: National Grid made profits of $1.43 Billion in its most recent fiscal year.

But gouging New Yorkers’ wallets was not enough to prevent the company from outsourcing jobs from central New York.

A Syracuse Post-Standard article noted that:

National Grid’s electric prices consistently rank among the handful of highest-priced major utilities in the country. In 2008, the company’s residential rates were 37 percent above the national average and its commercial rates were more than 60 percent higher, according to the latest statistics available from the U.S. Department of Energy.

This was primarily because of the expense National Grid incurred when it bought Niagara Mohawk. Once that expense was paid off, New Yorkers were told, rates would go down.

Wrong!

The company now wants to raise rates another 20 percent… that’s delivery rates, where the real gouging occurs. This would generate the monopoly another $390 million a year. Would this go to infrastructure upgrades? Improved service?

According to the Post Standard: Tom King, president of National Grid in the United States, said the company needs to make higher profits in order to attract money from shareholders and lenders to invest in the Upstate electric grid. Shareholders earned a 5 percent return on their Upstate electric investment last year, down from 10 percent in 2005.

Quite clearly, New Yorkers were duped.

In the mid-1990s, officials in the city of Glens Falls pushed for the creation of a municipal power company, like the one run successfully by the similarly-sized town of Massena. Nearby localities like Queensbury and Lake George could also have hooked up to the system.

Not surprisingly, the then-Niagara Mohawk saw this a threat to their lucrative business and waged a massively expensive and somewhat deceptive PR campaign which succeeded in defeating the project in a referendum.

I suspect Glens Falls residents regret the vote each time they open up their National Grid bill.


Thursday, July 16, 2009

Comments Sought on Route 28 Widening, Maintenance

The Adirondack Park Agency (APA) will hold a legislative hearing on Tuesday, July 28, 2009 at the Forestport Town Hall on a proposed widening and improvement of a ten mile stretch of Route 28 from Route 12 (in Forestport, Oneida County) to the Moose River in the Town of Webb (Herkimer County). The project sponsors, NYSDOT and National Grid, will also be there to answer questions or address concerns about the design of the project. APA staff will be available to discuss the permitting process. The legislative hearing will start at 6:15pm.

Here is a description of the project and other details on the meeting which were supplied by the APA:

The project begins approximately 6 miles north of the intersection of Routes 12 and 28 in Alder Creek and terminates at the Moose River in McKeever for a total project length of approximately 10.3 miles. The project consists of resurfacing a section from the southerly limit of the project for a length of approximately 2 miles; a reconstruction section for approximately 2.5 miles through Woodgate and a portion of White Lake; resurfacing a section with minor widening for a length of approximately 1.5 miles through a portion of White Lake; and resurfacing a section for the remainder of the project for a length of approximately 4.5 miles through Otter Lake to the Moose River in the Town of Webb. There will be utility relocations throughout the reconstruction section to provide a minimum offset from the edge of travel lane of 16 feet. There will be additional isolated utility pole relocations within the resurfacing sections to provide the same 16 foot offset.

PURPOSE OF MEETING: This is an informal legislative hearing conducted by the Adirondack Park Agency pursuant to APA Act section 804(6) to receive public comment on the proposed project. The hearing will include introductory presentations on the project design by the NYS Department of Transportation and National Grid. Agency staff will take notes on the public comment. Comments may be submitted by verbal statements during the hearing or by submitting a written statement. Agency Board Members and Designees may be present to hear the public comments. The Agency Board will make its decision on the project at one of its monthly meetings at some time in the near future.

GOAL OF THE MEETING: To allow the public to express concerns regarding this proposed project and how it may positively or negatively impact individual properties or the community.

MEETING FORMAT: NYSDOT, National Grid and APA personnel will be available from 5:30 to 6:15, prior to the formal presentation, to address any questions or concerns that individuals may have about the design of the project or the APA permitting process. At 6:15 APA Deputy Director Mark Sengenberger will commence the formal portion of the hearing. He will introduce NYSDOT and National Grid personnel who will make brief presentations concerning the project objectives, scope, schedule and cost. During the presentations, the public can ask questions for clarification purposes only. Following the presentations, members of the public will have the opportunity to make brief verbal statements about the project. There will be a sign up sheet for any persons wishing to make public comment. In order to allow everyone to speak who wants to, comments will be limited to no more than 3 minutes in length and speakers will go in the order that they signed up. Members of the public can provide additional written comments to the Agency at or after the meeting. Town of Forestport and Town of Webb officials will be present and introduced at the meeting.

APA Project No. 2008-0216

NYSDOT PIN: 2018.60