29th Jan 2016 17:03
LONDON (Alliance News) - National Grid PLC on Friday said it has requested a review of its gas distribution rates for its two gas distribution utilities in New York in the hope that they can be increased to fund further investment in the country.
National Grid is hoping its two utilities can increase annual revenue by USD387.0 million from 2017 onwards by increasing its distribution rates if authorities approve the company's proposals.
The electricity and gas company is mainly focused on the UK, where it operates the gas and electricity transmission systems, but National Grid also has growing operations based in the north-east of the US where it connects more than 7.0 million gas and electric customers to energy sources.
National Grid has requested the gas distribution rates for two of its utilities be updated as gas delivery rates have remained flat since 2008. It will be the first time National Grid has filed a request with the New York Public Service Commission to update its distribution rates since acquiring the assets.
The two utilities, KeySpan Energy Delivery New York (KEDNY) and KeySpan Energy Delivery Long Island (KEDLI), serve parts of New York City and the Long Island/Rockaway Peninsula region. National Grid added those two utilities to its portfolio through its acquisition of KeySpan back in 2007, and they now serve around 1.8 million customers.
Since that acquisition, National Grid said it has invested USD4.50 billion across the networks in order to modernise and build a safer and more reliable natural gas system for its customers.
"The rate case proposals will allow National Grid to meet customer expectations to modernize and enhance the safety, reliability and resilience of its ageing gas infrastructure and to upgrade the gas network to deliver economic and environmental benefits," said the company.
National Grid said the filings to the New York commission include the proposal to make capital investments of USD610.0 million into KEDNY and USD340.0 million into KEDLI. To fund those investments, National Grid is hoping to increase its annual revenue from 2017 onward.
The filing is expected to take up to 11 months to review and to conclude in December 2016, with new rates effective from the start of 2017.
National Grid is aiming to increase revenue from KEDNY by USD245.0 million per year and from KEDLI by USD142.0 million per year by increasing the distribution rates.
National Grid shares closed up 2.7% to 985.80 pence per share on Friday.
By Joshua Warner; [email protected]; @JoshAlliance
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