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National Grid may leave state over rates it considers too low

National Grid says it might pull its natural gas and electricity business out of New Hampshire because regulators have rejected its plan for new rates, although it has not made any formal notification for such a move. The British-based company provides electricity and natural gas in scattered locations around the state.

National Grid says it might pull its natural gas and electricity business out of New Hampshire because regulators have rejected its plan for new rates, although it has not made any formal notification for such a move.

The British-based company provides electricity and natural gas in scattered locations around the state, including natural gas customers in the Laconia and Tilton-Franklin areas.

National Grid indicated a wish to leave New Hampshire as part of recent financial filings made in Britain, in which it said that regulatory rulings on electric and natural gas rates in New Hampshire did not allow "acceptable" returns on investment. "Therefore we have decided to evaluate options to allow us to exit both these businesses," it said.

"We will take perhaps six months to take a look at the complete picture, examine all the options, and how we want to proceed," David Graves, spokesperson for National Grid, said Monday.

The company has much larger operations in Massachusetts, Rhode Island and New York state, which would not be affected by any New Hampshire move. New Hampshire has about 2 percent of the company's U.S. customer base.

Because it is a regulated utility providing... more [truncated due to possible copyright]  

National Grid says it might pull its natural gas and electricity business out of New Hampshire because regulators have rejected its plan for new rates, although it has not made any formal notification for such a move.

The British-based company provides electricity and natural gas in scattered locations around the state, including natural gas customers in the Laconia and Tilton-Franklin areas.

National Grid indicated a wish to leave New Hampshire as part of recent financial filings made in Britain, in which it said that regulatory rulings on electric and natural gas rates in New Hampshire did not allow "acceptable" returns on investment. "Therefore we have decided to evaluate options to allow us to exit both these businesses," it said.

"We will take perhaps six months to take a look at the complete picture, examine all the options, and how we want to proceed," David Graves, spokesperson for National Grid, said Monday.

The company has much larger operations in Massachusetts, Rhode Island and New York state, which would not be affected by any New Hampshire move. New Hampshire has about 2 percent of the company's U.S. customer base.

Because it is a regulated utility providing energy services as a monopoly within geographic franchise areas, National Grid could not exit New Hampshire the way an unregulated business could, by shutting down.

It would have to sell its operation to another firm, just as Verizon sold its regulated telephone lines to FairPoint, for example.

In fact, National Grid entered New Hampshire by making such purchases, buying the franchise of Granite State Electric, and in 2007 the natural gas franchise of KeySpan, which had bought it from EnergyNorth.

The New Hampshire Public Utilities Commission would have to approve any sale, which would probably require a determination of public good.

On Monday, PUC officials said they have not received any filing or formal notification of any plans.

Graves said National Grid's desire to leave New Hampshire dates back to a May 2009 decision by the PUC on a rate filing, in which the company sought an increase in gas distribution rates. Those rates are designed to cover infrastructure and other long-term costs, rather than fluctuating costs of natural gas itself.

Among other things, Graves said the PUC declined to change the "base year" on which costs are calculated.

"It is several years behind current year expenses, so we're always behind the 8 ball," he said.

NationalGrid made another a filing earlier this year, which is still being processed. It would raise rates about 10 percent for residential heating customers and about 15 percent for residential nonheating customers.

In Massachusetts, National Grid has maintained a high profile - most notably by being the first major utility to sign a long-term agreement to buy power from the contentious Cape Wind offshore wind farm.


Source: http://www.fosters.com/apps...

MAY 25 2010
https://www.windaction.org/posts/26461-national-grid-may-leave-state-over-rates-it-considers-too-low
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