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FOR IMMEDIATE RELEASE: September 21, 2010


On Sunday, Nat Grid International Boss Apologized For Mistakes And Criticized American Subsidiary for Using Ratepayers' Money to Fund Everything from Wine Purchases to Private Schools

Schumer Said Rate Hike Request is Now Fatally Tainted and National Grid Should Withdraw Request Until Audit is Finished - Will Show Apology is Sincere

Schumer: Rate Hike Request is Fatally Tainted a

Today U.S. Senator Charles E. Schumer called on National Grid’s international CEO, Steve Holliday, to direct its American subsidiary to immediately withdraw its rate request and hold off on resubmitting it until the investigation into their finances is complete.  On Sunday CEO Steve Holliday apologized for the American operation’s mistakes, and Schumer said that he should put his money where his mouth is and direct the American division to withdraw its rate request.  Last week New York’s Public Service Commission (PSC) voted to begin an investigation into National Grid after an initial report showed that the company was billing ratepayers for items such as shipping fees for an executive’s wine collection, another executive’s washing machine repair and private school tuition for yet another executive’s kids.  Schumer said that National Grid’s rate request was now hopelessly tainted in the eyes of ratepayers and should be withdrawn, as is allowed under state law.  


“It’s good to hear the international head of National Grid admitting the obvious in the face of these outrageous abuses- that the American division has made tremendous mistakes, but actions speak louder than words,” said Schumer.  “Mr. Holliday should direct the American division to immediately withdraw its rate request while this audit is conducted and only resubmit it once the audit is complete.  Their current request is now fatally tainted in the eyes of consumers.”


Two weeks ago, an initial review in National Grid’s expenses revealed that the company was trying to pass off inappropriate expenses on to Upstate customers. The initial investigation revealed expenses on things like $1,254 for an executive’s wine collection, repair of another executive’s washing machine and tuition payments for another executives children’s private school. In total the state Department of Public Service has identified $26 million in questionable expenses. Last week, Schumer said the current PSC review of National Grid’s rate hike request should be suspended until a full investigation is held that ensures inappropriate expenses will not be passed on to Upstate customers.  Today Schumer is urging National Grid’s CEO to take matters into his own hands and withdraw the request, as is the company’s right under law. 


In 2002, National Grid took over Niagara Mohawk Power Corporation and assumed responsibility for Niagara’s debt. Over the past ten years, New Yorkers have paid a “competitive transition charge” to finance this debt, which is scheduled to be paid down in 2011. For families forced to shoulder the burden of this debt through higher utility bills, the year 2011 was to mark a significant decrease in their electricity payments. Unfortunately, National Grid has applied for a 20% percent delivery rate increase beginning in 2011, meaning residents will receive no relief in their utility bills. Schumer has already asked the PSC to deny that request for a rate hike.  


National Grid’s electric prices are among the highest in the nation, and have consistently been a hindrance when trying to attract or expand businesses to the region – especially ones that require a great deal of power. In 2008, residential rates were 37% higher than the national average and commercial rates were over 60% higher, according to Department of Energy statistics. National Grid has consistently asked the Public Service Commission to approve delivery rate hikes.


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