NEW YORK CITY — National Grid is asking New York regulators to approve a plan that would keep its current gas rates in place through March 2028 while allowing the utility to spend about $1.7 billion on its gas system.
The company would defer much of the cost of those investments and begin recovering it from customers in 2028.
National Grid filed the "rate stabilization" proposal as energy costs continue to strain household budgets across New York.
Low-income households spend nearly 13 percent of their income on energy, compared with 3.4 percent for the average household, according to the New York State Energy Research and Development Authority.
Without the new plan, customers would stop paying about $250 million in charges from an earlier rate case when those charges expire in 2027.
Instead of allowing those charges to end, National Grid would keep rates at their current level and defer the cost of its new investments until 2028, when it would begin recovering those costs from customers.
The plan would also allow National Grid to impose an annual surcharge of up to 2.5 percent to recover some of the costs deferred during the rate stabilization period.
The Alliance for a Green Economy, an energy advocacy group, challenged the proposal Wednesday.
Attorneys with Earthjustice, a nonprofit environmental law organization, submitted comments to the commission on the group's behalf, asking regulators to reject the plan and require National Grid to go through a formal rate case.
"They're basically taking out a credit card," Matthew Silverman, a senior attorney at Earthjustice, said.
"You don't have to pay anything for the next year, and then when that teaser period ends, you get slammed with a bunch of charges."
National Grid's plan includes about $1.7 billion to expand and reinforce its gas system, including upgrades to aging equipment.
More than $60 million would go to the company's liquefied natural gas facility in Greenpoint, Brooklyn, a large waterfront site in a neighborhood with a long history of industrial pollution.
Greenpoint contains several federal and state Superfund sites, including Newtown Creek, Meeker Avenue, the Greenpoint oil spill and Nuhart.
The proposed work includes $3.91 million to replace aging equipment, $6.71 million for plant controls, $8.28 million to replace a roughly 60-year-old nitrogen supply system and $14.7 million to replace a tail gas compressor of similar age.
National Grid also proposes $3.64 million for a new maintenance and control building and $12.8 million for a backup power system tied to safety and fire-protection upgrades.
The facility operates as a "peaker," supplying gas during periods of high demand rather than running continuously.
Last year, the Public Service Commission directed National Grid to study whether it could decommission the Greenpoint facility and identify alternatives.
National Grid is seeking approval through a notice-and-comment proceeding rather than a formal rate case.
A formal rate case requires a utility to provide detailed financial and operational records.
Regulators, consumer advocates and other groups can request additional information, question company witnesses at a hearing and negotiate changes to the proposal.
"We get very limited information," Silverman said.
"The company has taken the position that they don't actually have to give us information through what we would normally get through discovery in a rate case."
AARP New York urged regulators to reject the plan or require a formal rate case, citing the size of the proposed spending and the lack of the broader review that accompanies a rate case.
Silverman also cited a provision of New York's Public Service Law requiring a formal rate case when a utility's proposed increase in total revenue exceeds 2.5 percent.
The Public Service Commission has not yet issued a decision on National Grid's proposal. The case remains open, with 240 public comments and 37 documents filed as of Monday.
The commission could approve the plan, reject it, seek changes or require National Grid to pursue a formal rate case.
National Grid's petition argues the commission should approve the proposal as filed. The company has also said it could pursue a traditional rate case if regulators do not approve its request.
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