National Grid Natural Gas Rates Heading Down in Rhode Island

October 16, 2014 – Just as furnaces are cranking up to warm Rhode Island homes through the winter months, National Grid customers can expect to pay lower rates for their natural gas. The company is proposing to reduce natural gas rates starting November 1 with the permission of the Rhode Island Public Utilities Commission. The proposed rates will be reduced by an average of 8 percent compared to current rates. For the average residential heating customer using 846 therms during a twelve month period, this means an annual savings of $106.55 as total charges go from the current $1,309.75 to $1,203.21.

“This is obviously good news for our Rhode Island natural gas customers,” said Timothy F. Horan, President of National Grid in Rhode Island. “More and more Rhode Islanders have opted to switch to natural gas as a cleaner and more efficient source of energy. This rate reduction is one more benefit for them.”

Rhode Island natural gas rates are set on November 1, typically for a twelve-month period. Most supplies of natural gas are secured at different times during the year. National Grid buys natural gas for its customers and provides it with no mark up in the price. The reduction in gas rates is composed of multiple factors. The primary drivers for the rate reduction are lower cost of the gas purchased and a credit to be provided to customers as a result of last year’s colder weather. Today’s current gas rates reflect an increase implemented on April 1 as a result of higher gas costs than originally estimated. Natural gas rates expected to take effect on November 1 this year will be, on average, 3.2 percent lower than rates that went into effect in November of 2013.

Electric Rates

In mid-November the company plans to file proposed electric rates that will take effect on January 1, 2015. Like natural gas, National Grid purchases electricity for its customers and provides it with no mark up. Electric rates throughout New England have either increased or are predicted to increase substantially due to the anticipated increase in the cost of electricity charged by wholesale suppliers in the coming months.

The increase is the result of constraints in the natural gas transmission system feeding the region. While these constraints have little or no impact on residential and commercial natural gas customers, the opposite is true for electric generation.

Approximately 50 percent of the electric supply used in New England is generated by burning natural gas. On the coldest winter days, the system can only provide adequate supplies for residential and commercial gas customers. When pipeline constraints limit supply, the generating facilities must switch to more costly fuels or purchase natural gas on the expensive spot market, driving up generating costs, and ultimately, the price of electricity.

One of the roles played by ISO-New England is to design, run and oversee the markets where wholesale electricity supply is bought and sold in the region. ISO-New England has identified the constraints in the gas transmission system feeding New England as the reason behind the increase in the cost of electricity.

National Grid purchases electricity on behalf of its Rhode Island residential and commercial customers at various points throughout the year. This practice tends to limit price spikes, but the market forces that have caused electric supply rate increases elsewhere in the region will likely impact Rhode Island as well. The extent of that impact will be reflected in the company’s mid-November filing.

Managing Energy Costs

For those customers looking to manage their energy consumption, National Grid has been helping New England customers realize energy savings through energy efficiency programs for more than 30 years. The company encourages customers to learn about energy efficiency, savings tips and much more at www.nationalgridus.com/EnergyEfficiencyServices.

Billing options and discount rates also are available to help eligible customers who may have difficulty paying their monthly gas or electric bill. National Grid offers billing programs to help customers spread payments out more evenly across the year, which are particularly helpful to those on fixed incomes. Discounted rates are based on certain eligibility requirements. For more information about the availability of these rates, customers should contact National Grid at 800-322-3223 or their local energy assistance agency, Community Action Agency or state department of social services.

About National Grid

National Grid (LSE: NG; NYSE:NGG) is an electricity and gas company that connects consumers to energy

sources through its networks. The company is at the heart of one of the greatest challenges facing our

society - to create new, sustainable energy solutions for the future and develop an energy system that

underpins economic prosperity in the 21st century. National Grid holds a vital position at the center of the

energy system and it ‘joins everything up’.

In the northeast U.S., we connect more than seven million gas and electric customers to vital energy sources, essential for our modern lifestyles. In Great Britain, we run the gas and electricity systems that our society is

built on, delivering gas and electricity across the country.

National Grid delivers electricity to approximately 3.3 million customers in Massachusetts, New York and

Rhode Island. It is the largest distributor of natural gas in northeastern U.S., serving approximately 3.4 million customers in New York, Massachusetts and Rhode Island.

For more information please visit our website: www.nationalgridus.com.

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