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FOR IMMEDIATE RELEASE: September 17, 2010

SCHUMER TO PSC: SUSPEND REVIEW OF NATIONAL GRID'S RATE INCREASE REQUEST UNTIL INVESTIGATION INTO OUTRAGEOUS SPENDING IS COMPLETE

Yesterday, PSC Initiated an Investigation Into National Grid's Spending Practices After Initial Reviews Showed Outrageous Expenses - Company Charged Rate Payers For Shipping Wine Collections And Education of Executives' Kids

Schumer Has Long Been Suspicious of National Grid Rate Hike Request, Which Would Prevent Consumers From Receiving Expected Rate Decreases in 2011

Schumer Calls On PSC To Immediately Suspend Review of Rate Request and Require National Grid to Submit New Request once Investigation is Complete

Today U.S. Senator Charles E. Schumer released a letter calling on New York’s Public Service Commission (PSC) to suspend their review of National Grid’s rate increase request until the investigation into their finances is complete.  Yesterday the PSC voted to begin an investigation into National Grid after an initial report showed that the company was billing rate payers 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.  Requiring National Grid to resubmit their rate request will allow for a more thorough vetting and will also delay any possible rate increase. 

 

“National Grid has already pulled a bait and switch on consumers when, a decade ago, they said rates would go down in 2011.  And now they are trying to get us to pay for these perks for their executives – it’s outrageous,” said Schumer.  “The PSC needs to scrap National Grid’s rate request, complete their investigation and the require National Grid to start the process over.”

 

Just last week, 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. Today, 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.  Once the review is complete, Schumer said the PSC should require National Grid to resubmit their rate request. 

 

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.

 

Today, Schumer pledged to keep pressing the PSC to suspend its review of National Grid’s rate hike and get to the bottom of these outrageous expenses.   

 

 

 

Chairman Garry A. Brown

New York State Public Service Commission

Empire State Plaza

Agency Building 3

Albany, NY 12223-1350

 

Dear Chairman Brown,

 

I write to express my concerns regarding National Grid’s current rate increase request, in light of the recent disturbing spending decisions turned up by the Public Service Commission (PSC).  The initial PSC examination suggests that National Grid is seeking to have consumers foot the bill for a number of questionable expenses, and raises important questions about the basis of the entire National Grid rate increase request. 

 

While I am gratified the PSC has decided to investigate the appropriateness of National Grid’s expenses, I would also urge the PSC to immediately suspend any consideration of a rate increase until such an investigation into expense reimbursement and relocation policies has been completed.  Furthermore, it would be appropriate for the PSC to categorically deny National Grid’s rate increase request and require them to submit a new request after the investigation has been concluded. 

 

It is imperative that there be a complete review of National Grid’s records to fully understand the basis of their rate request. Additionally, it is inappropriate to consider imposing a $400 million rate increase on Upstate consumers when there are legitimate questions about the costs National Grid is seeking to have consumers cover.

 

National Grid provides electrical and natural gas service to over two million customers in Upstate New York, making New York State residents National Grid USA’s largest customer base. New York families served by National Grid should not be paying for frivolous expenses at a time when rising utility costs are stretching family budgets to the brink.  I urge you to suspend the rate increase consideration to ensure there is no inappropriate overcharging of New York customers. Thank you for your time and consideration of this important matter. Please contact my office if you have any questions or need additional information.

 

Sincerely

 

Charles E. Schumer

United States Senator

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