Decision on Niagara Mohawk el

RNS Number : 8658Z

National Grid PLC

21 January 2011

 



21 January  2011      

National Grid plc

Decision on Niagara Mohawk electric rate case

On 20 January 2011, Niagara Mohawk Power Corporation received the verbal decision from the New York Public Service Commission ("NYPSC") on its request to increase distribution and transmission rates and implement certain other rate mechanisms for its electric business in New York.

While we await a written order, the key points from the Commission session appear to be as follows:

·    Rates are established for a 2011 rate year.  The rates would take effect on 1 February 2011 
retroactive to 1 January 2011 without any restriction on the Company's right to file a new rate case.  

·     A return on equity of 9.1 percent and a common equity ratio of 48 percent.

·     If National Grid agrees to not file for a new rate case before January 2012, a 20 basis point 
premium will be added to the return on equity.

·     An increase in delivery revenue of $112.7 million of which $50.0 million was approved on a 
temporary basis pending the outcome of a review of affiliate service company costs.  Part of the increase in delivery revenues relates to the one-off recovery of certain stranded costs in 2011. To remove any increase in customer bills in 2011, the revenue increase will be offset by extending the period for recovery of certain deferred costs under the current rate plan.

National Grid has been requested to file, in July 2011, a proposal for final recovery of all deferred costs under the existing rate plan, currently estimated at $205 million.

·     Establishes a revenue decoupling mechanism for all customer classes eligible for the 
Company's energy efficiency programs, providing the opportunity to recover lost base revenue resulting from customer-driven energy efficiency and other conservation measures that reduce sales volumes.

·    Rates are based on capex spending of $428.5 million for fiscal year 2011 and $433.3 million 
for fiscal year 2012.  Establishes cost allowance on vegetation management, distribution, inspection & maintenance and various transmission O&M items.

·    Continues to allow for the full recovery of pension, OPEB and energy supply costs.  

National Grid will be reviewing the details of this decision and developing a response in due course.

CONTACTS

National Grid:

Investors                                                                                                                                                                    

David Rees	[phone]	[phone] (m)
George Laskaris	[phone]	[phone] (m)
Andy Mead	[phone]	[phone] (m)
Michael Smart	[phone]	[phone] (m)
Iwan Hughes	[phone]	[phone] (m)

Media                                                                                                                                                                          

Chris Mostyn	[phone]	[phone] (m)
Deborah Taylor	[phone]	[phone] (m)
Stephen Brady	[phone]	[phone] (m)

Brunswick Tom Burns Tom Batchelar

[phone]

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 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; network failure or interruption, the inability to carry out critical non-network operations and damage to infrastructure; performance against regulatory targets and standards, including delivery of costs and efficiency savings; customers and counterparties failing to perform their obligations to National Grid; and unseasonable weather affecting energy demands. Other factors that could cause actual results to differ materially from those described in this announcement include fluctuations in exchange rates, interest rates, commodity price indices and settlement of hedging arrangements; restrictions in National Grid's borrowing and debt arrangements; changes to credit ratings of National Grid and its subsidiaries; adverse changes and volatility in the global credit markets; National Grid's ability to access capital markets and other sources of credit in a timely manner and other sources of credit on acceptable terms; deflation or inflation; the seasonality of National Grid's businesses; the future funding requirements of National Grid's pension schemes and other post-retirement benefit schemes, and the regulatory treatment of pension costs; the loss of key personnel or the inability to attract, train or retain qualified personnel; new or revised accounting standards, rules and interpretations, including changes of law and accounting standards that may affect National Grid's effective rate of tax; incorrect assumptions or conclusions underpinning business development activity, and any unforeseen significant liabilities or other unanticipated or unintended effects of such activities and the performance of National Grid's subsidiaries. In addition National Grid's reputation may be harmed if consumers of energy suffer a disruption to their supply. 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 its 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 its 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 contents of any website references herein do not form part of this announcement.

 

END

 

 

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