30th Apr 2012 11:03
30 April 2012
National Grid plc
Files for updated rate plans in upstate New York utility
National Grid on 27 April made a one year rate plan filing with the New York Public Service Commission in respect of its Niagara Mohawk gas and electric utility. A full press release in respect of the filing has been issued separately and is available on National Grid's website along with further details of the filing.
In the filing, National Grid proposes to further invest in infrastructure upgrades and new technologies to maintain the safety and reliability of the electric and gas distribution systems in upstate New York and help customers manage their energy costs. Since 2007, National Grid's electric business in the region has met or exceeded annual regulatory targets for the number of outages, length of outage and customer satisfaction, due in part to investing more than $1.5 billion to strengthen its network. At the same time, on the gas side, the Company has replaced over 140 miles of leak prone pipe over the past four years.
In order to ensure the new investments are effectively implemented, the new filing seeks approval for new gas and electric rates and an increased cost of service allowances that recover the cost of the investment needs for the business.
The Company is requesting approximately $131 million per annum of incremental electric service costs beginning next year. This would be more than offset by $190 million per annum of rate reductions related to the recovery of certain past deferred costs, resulting in an overall net decrease of approximately $59 million to customers.
The Company also is requesting approximately $40 million in incremental costs for gas delivery, which would be partially offset by a net decrease in deferral recovery of $29 million.
The filing, which is expected to take 11 months to review and to conclude in March 2013, includes investments of $454 million and $82 million in the electric and gas businesses, respectively. The increased electric service costs also include the creation of a $29 million sustainable storm fund.
CAUTIONARY STATEMENT
This announcement contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include information with respect to National Grid's financial condition, its results of operations and businesses, strategy, plans and objectives. Words such as 'anticipates', 'expects', 'intends', 'plans', 'believes', 'seeks', 'estimates', 'targets', 'may', 'will', 'continue', 'project' and similar expressions, as well as statements in the future tense, identify forward-looking statements. These forward-looking statements are not guarantees of National Grid's future performance and are subject to assumptions, risks and uncertainties that could cause actual future results to differ materially from those expressed in or implied by such forward-looking statements. Many of these assumptions, risks and uncertainties relate to factors that are beyond National Grid's ability to control or estimate precisely, such as changes in laws or regulations and decisions by governmental bodies or regulators; breaches of, or changes in, environmental, climate change and health and safety laws or regulations, including breaches arising from the potentially harmful nature of its activities; network failure or interruption, the inability to carry out critical non network operations and damage to infrastructure, due to adverse weather conditions including the impact of Hurricane Irene and other storms; performance against regulatory targets and standards and against National Grid's peers with the aim of delivering stakeholder expectations regarding costs and efficiency savings, including those related to investment programmes, restructuring and internal transformation projects; and customers and counterparties failing to perform their obligations to the Company. Other factors that could cause actual results to differ materially from those described in this announcement include fluctuations in exchange rates, interest rates and commodity price indices; restrictions in National Grid's borrowing and debt arrangements, funding costs and access to financing; National Grid's status as a holding company with no revenue generating operations of its own; inflation; seasonal fluctuations; the funding requirements of its pension schemes and other post-retirement benefit schemes; the loss of key personnel or the ability to attract, train or retain qualified personnel and any disputes arising with its employees or the breach of laws or regulations by its employees; accounting standards, rules and interpretations, including changes of law and accounting standards and other factors that may affect National Grid's effective rate of tax; and incorrect or unforeseen assumptions or conclusions relating to business development activity. For a more detailed description of some of these assumptions, risks and uncertainties, together with any other risk factors, please see National Grid's filings with and submissions to the US Securities and Exchange Commission (the 'SEC') (and in particular the 'Risk factors' and 'Operating and Financial Review' sections in our most recent Annual Report on Form 20-F). The effects of these factors are difficult to predict. New factors emerge from time to time and National Grid cannot assess the potential impact of any such factor on its activities or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Except as may be required by law or regulation, National Grid undertakes no obligation to update any of its forward-looking statements, which speak only as of the date of this announcement. The content of any website references herein do not form part of this announcement.
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