Environmental group wants state to block rate hikes for National Grid customers

By Kristina Rex

August 7, 2023 / 6:21 PM / CBS Boston

BOSTON – A Boston-based environmental agency is encouraging the state to reject a proposed rate hike from a leading electrical supplier.

Conservation Law Foundation wrote a letter to the Department of Public Utilities asking it to consider regulation that would require electric companies to analyze and improve their own infrastructure before passing the expense onto customers. "We urge the Department to deny National Grid's request to recover costs associated with the exogenous storm event because its failure to assess its infrastructure's readiness for foreseeable storm events was imprudent and thus it is unreasonable to pass these costs on to ratepayers," the letter said.

National Grid has applied to the Department of Public Utilities, asking for permission to raise electric rates in October 2023 to cover the cost of storms from 2021. In particular, an October 2021 nor'easter that cost the company more than $50 million is leading to this rate hike.

National Grid has a budget that accounts for about four major storms per year, based on past test years. However, in 2020, the state had 14 major storms. In 2021 and 2022, there were nine each year, leaving the company to spend more than $100 million in storm repair costs than had been in the budget.

This reality is prompting the proposed rate hike, which National Grid says will raise the average customer's bill only $3.36 a month.

The Conservation Law Foundation believes National Grid should have to improve its infrastructure to proactively prepare for future storms before it is able to collect higher rates from customers. The company should be "looking at infrastructure to make sure that it is not subject to repeat destruction," explained CLF staff attorney Johannes Epke. "There are physical things that they can do to their system, to make it harder, stronger, more resilient to the strong storms that we are now seeing more regularly."

WBZ's Question Everything series has previously explored the challenges with moving power lines underground.

The biggest challenge, CLF believes, is climate change. As storms become stronger and more frequent, rates will likely continue to increase. "The cost for an average residential consumer will only go up a few percent for this one particular storm, but if [National Grid] continue[s] to kick…that can down the road, then the storm cost will pile up and rates will continue to rise for consumers," Epke said.

In a statement to WBZ, National Grid countered that it already has invested in improving its infrastructure. The statement reads, in part:

"Over the past five years, National Grid has made substantial investments to improve the reliability and resilience of its distribution system, including having inspected and manage vegetation on 12,850 miles of distribution lines to improve reliability; installed 200 automated power restoration devices, helping reduce outage times by 55%; and replaced 62,000 poles, 25,000 transformers and 1,200+ high-voltage switches to strengthen our system. National Grid has also made investments in substation flood mitigation, underground cable replacement, Fault Location Isolation and Service Restoration (FLISR), feeder hardening, development of coastal area construction standards, and changes to construction standards and materials."

The Department of Public Utilities said it "is reviewing CLF's comments regarding storm recovery costs. The Chair and Commissioners are working to transform the DPU to proactively protect and harden the electric grid from worsening climate risks while also mitigating impacts on utility bills for Massachusetts residents and businesses."

Kristina Rex is a reporter for WBZ-TV News.

First published on August 7, 2023 / 6:21 PM