National Grid New York Rate Plan Builds on Electric Bill Decrease; Proposes Stable Electric and Gas Rates

ALBANY, NY (04/27/2012)(readMedia)-- Advisory: National Grid will host a media conference call Friday April 27, 2012 at 1 p.m. to provide a briefing on today's announcement. Media can participate in the call by dialing 1-888-889-0493, passcode: National Grid.

A replay of the call will be available at 3 p.m. for 24 hours by dialing 1-203-369-3273.

• Plan includes second electric delivery rate decrease in 15 months
• Modest natural gas delivery rate increase proposed
• Proposes increases in low-income funding, economic development programs

National Grid electric and gas customers in upstate New York would see stable energy delivery rates into 2014 as part of a proposal submitted today to the New York State Public Service Commission (PSC). The proposal continues and expands electric delivery cost decreases started earlier this year.

"Our goal has been to keep customer bills stable, while also continuing to invest in our energy infrastructure to further improve reliability and expand our support for the economic growth and vitality of the local communities we serve," said Ken Daly, National Grid president for New York. "Today's filing is the culmination of months of listening to our customers, regulators and policy makers to develop the way forward for our upstate New York customers that will provide safe, reliable energy and keep bills stable."

Under National Grid's proposal, which is subject to full PSC review, the company is requesting an electric delivery rate increase of approximately $131 million beginning next year. This would be more than offset by approximately $190 million that will be removed from rates as past costs are retired, resulting in an overall reduction in electric revenues of approximately $59 million.

This results in a net decrease for most electric customer classes and represents a total bill decrease of 2.1 percent for the typical residential customer, about $1.74 per month. Customers have already seen a delivery rate reduction that began this past January, including an average reduction of about 11 percent for residential customers.

The company also is requesting an increase of approximately $40 million for its natural gas delivery business, which would be partially offset by a decrease in deferral recovery of $29 million. This results in a modest increase of less than $11 million in gas revenues, and represents a total bill increase of 2.3 percent for the typical residential gas heating customer, or about $1.88 a month. Delivery rates for gas service were last adjusted in 2010.

IMPACT OF PROPOSAL

The charts below illustrate the impact of the bill reductions that took effect this year, and the proposed changes that would take effect April 1, 2013, if approved, assuming equal usage on both a delivery bill and total bill basis:

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National Grid's rate proposal affects primarily the delivery rates for both electric and natural gas service. The Company is proposing to update the merchant function charges included in commodity portion of the bill. This charge reflects the costs incurred to purchase electricity and natural gas for customers. The cost of the actual energy delivered – electricity and natural gas – will vary by market prices and are passed along to National Grid customers without markup. Changes in commodity prices will play a role in affecting overall customer bills in the future.

In the filing National Grid also commits to:

• Increase assistance for qualifying low-income natural gas customers through support program enhancements.
• Enhance economic development opportunities for commercial customers to spur growth and employment in our communities, including the development of programs for natural gas customers that are modeled on the company's very successful electric programs.
• Increase efforts to educate customers on electric and gas safety, storm preparedness, and understanding and managing their bills, including increased social media outreach.
• Expand alternative fuel opportunity with funding that will allow additional compressed natural gas (CNG) and electric fueling stations to be installed across upstate New York.
• Paperless billing option, in which customers who elect to receive their bills electronically would receive a credit that represents the cost to produce a paper bill versus an electronic bill.

As part of the filing, National Grid expects to continue its extensive investment in the safety and reliability of its electric and natural gas distribution systems in upstate New York. Continuing this investment in infrastructure upgrades and new technologies will help meet customer needs and help customers manage their energy costs.

The proposal would enable National Grid to investigate expansion of natural gas service in upstate New York to enable customers to take advantage of historically low natural gas commodity costs that have remained stable for the past several years.

"We know that our ability to deliver energy safely and reliably to our customers is a major factor in the continued growth of our upstate economies. This plan will help us to continue to play a major role in the economic revitalization of upstate New York," said Daly.

National Grid (LSE: NG; NYSE:NGG) is an electricity and gas company that connects consumers to energy sources through its networks. The company is at the heart of one of the greatest challenges facing our society - to create new, sustainable energy solutions for the future and developing an energy system that underpins economic prosperity in the 21st century. National Grid holds a vital position at the center of the energy system and it 'joins everything up'.

In the northeast US, we connect more than seven million gas and electric customers to vital energy sources, essential for our modern lifestyles. In Great Britain, we run the gas and electricity systems that our society is built on, delivering gas and electricity across the country.

National Grid delivers electricity to approximately 3.3 million customers in Massachusetts, New Hampshire, New York and Rhode Island. It manages the electricity network on Long Island under an agreement with the Long Island Power Authority (LIPA), and owns over 4,000 megawatts of contracted electricity generation, providing power to over one million LIPA customers. It is the largest distributor of natural gas in northeastern U.S., serving approximately 3.4 million customers in New York, Massachusetts, New Hampshire and Rhode Island.

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