Category: NYS rate cases

The New York Public Service Commission (PSC) unanimously approved a joint proposal on August 14, 2025, establishing a three-year electric and gas delivery rate plan for Niagara Mohawk Power Corporation (NMPC) d/b/a National Grid for service years 2025-2028.  This article describes how Department of Public Service (DPS) blew off the concerns I raised about implementation of the Climate Leadership & Community Protection Act (Climate Act) net-zero programs in the rate case.

I am convinced that implementation of the Climate Act will do more harm than good if the future electric system relies only on wind, solar, and energy storage because of reliability and affordability risks.  I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 550 articles about New York’s net-zero transition.  The opinions expressed in this article do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone. 

Background

The Climate Leadership & Community Protection Act (Climate Act) established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050 and has two electric sector targets: 70% of the electricity must come from renewable energy by 2030 and all electricity must be generated by “zero-emissions” resources by 2040. Buried in all the recent utility rate cases is funding for programs to meet these targets.

Regular readers may recall that I got involved in this rate case in May. Constantine Kontogiannis and I filed a statement in opposition to the Joint Proposal (JP) settlement plan that was eventually approved on August 14..  We submitted because of our concern that, with its disproportionate efforts to support the goals of the Climate Act, the JP does not properly balance NMPC and Public Service Commission responsibilities to ensure reliable, affordable, and environmentally responsible energy generation and delivery to ratepayers. 

One of our arguments was that Public Service Law (PSL) Section 66-P, “Establishment of a renewable energy program”, includes bounds on implementation that were not considered in the rate case. In a subsequent post I described the DPS Staff Reply Statement in Support of the JP that addressed our concerns. They basically blew off all our issues based on procedural technicalities, claims that the safety valve bounds were a statewide concern not appropriate for the rate case, and said that we did not prove that the exceedance of the safety valve trigger was because of the Climate Act.

This post describes the approved rate case.  I will follow up with another post that  responds to the Order Adopting Terms of the Joint Proposal.

Settlement Announcement

The press release that announced the adoption of the rate plan headline stated that “PSC Dramatically Reduces National Grid’s Rate Request”.  It went on to say:

 The New York State Public Service Commission (Commission) today adopted a joint proposal establishing three-year electric and gas rate plans for National Grid signed by 15 parties, including the company, Department of Public Service staff, consumer advocates, trade and labor groups, and large industrial customers. The Commission’s action will significantly reduce the company’s request for total electric delivery revenues by over $340 million (67% decrease from request) and total gas delivery revenues by nearly $100 million (63% decrease from request) in the first year. The adopted joint proposal delivers $110 million in annual efficiency savings, defers non-essential capital projects, and supports energy affordability programs and protections for vulnerable customers.

National Grid had sought a base delivery increase of $509.6 million (25.5 percent delivery or 10.4 percent total revenue) and $156.5 million (29.7 percent delivery or 15.7 percent total revenue) for electric and gas, respectively for one year. Instead, the Commission adopted a joint proposal establishing levelized increases, on a percentage basis, to the company’s electric revenues of $167.3 million in the first year, $297.4 million in the second year, and $243.4 million in the third year. Levelized revenues to the company’s gas revenues are $57.4 million, $64.5 million, and $71.8 million, respectively, in each of the upcoming rate years beginning September 1, 2025. National Grid, previously known as Niagara Mohawk Power Corporation, provides utility service to 2.3 million customers in upstate New York.

Rate Case Summary

All the rate case DPS DMM materials are available here.  These are the documents included in the final rate case settlement:

Document Title	File Name
Order Adopting Terms of Joint Proposal and Establishing Rate Plans	201_24-E-0322 G-0323 final.pdf
Attachment A	201_24-E-0322 et al. Attachment A.pdf
Attachment A – Appendix 1 – Appendix 2, Schedule 4.3	201_24-E-0322 et al Attachment A_ Appendix 1 – Appendix 2, Schedule 4.3.pdf
Attachment A – Appendix 2, Schedule 5- Appendix 2, Schedule 16	201_24-E-0322 et al Attachment A_Appendix 2, Schedule 5- Appendix 2, Schedule 16.pdf
Attachment A – Appendix 3-12	201_24-E-0322 et al Attachment A_ Appendix 3-12.pdf
Attachment A – Appendix 13-17	201_24-E-0322 et al Attachment A_ Appendix 13-17.pdf
Attachment B	201_24.E.0322.G-0323_Attachment B.pdf

I did not want to wade through these documents, so I used an AI program.  I acknowledge the use of Perplexity to generate the following  summary.  I have compiled all the responses to my queries. This section summarizes the highlights by quoting the Perplexity answer. In response to queries asking for a summary of the adoption of the plans I got the following response.

Gas Rate Structure and Customer Impact

Gas Delivery Revenue Increases:

• Rate Year 1 (April 1, 2025 – March 31, 2026): $57.4 million increase dps.ny
• Rate Year 2 (April 1, 2026 – March 31, 2027): $64.5 million increase
• Rate Year 3 (April 1, 2027 – March 31, 2028): $71.8 million increase

Gas Rate Plan Customer Bill Impacts:
For residential customers using an average of 78 therms per month, the total monthly bill increases are projected at:

• Year 1: $7.66 per month (5.5% total revenue increase) nationalgridus+2
• Year 2: $8.08 per month (5.5% total revenue increase)
• Year 3: $9.18 per month (6.0% total revenue increase)

Electric Rate Structure and Customer Impact

Electric Delivery Revenue Increases:

• Rate Year 1 (April 1, 2025 – March 31, 2026): $167.3 million increase dps.ny
• Rate Year 2 (April 1, 2026 – March 31, 2027): $297.4 million increase
• Rate Year 3 (April 1, 2027 – March 31, 2028): $243.4 million increase

Customer Bill Impacts:
For residential customers using an average of 625 kilowatt-hours per month, the total monthly bill increases are projected at:

• Year 1: $14.32 per month (3.4% total revenue increase) nationalgridus+2
• Year 2: $6.44 per month (5.6% total revenue increase)
• Year 3: $4.34 per month (4.6% total revenue increase)

Rate Case and the Climate Act

I also queried Perplexity: “How much of the approved rate was for Climate Act and other state mandated projects.”  The response stated:

Gas Plan Climate and Environmental Provisions

The rate plan advances New York’s climate objectives under the Climate Leadership and Community Protection Act (CLCPA):

• Non-Pipeline Alternatives (NPAs): Continued evaluation and promotion of alternatives to traditional gas infrastructure expansion dps.ny
• Methane Emissions Reduction: Enhanced leak detection and survey programs to identify and repair high-emitting leaks dps.ny
• Renewable Natural Gas: Support for connecting renewable natural gas projects dps.ny
• Integrated Energy Planning: Coordination between gas, electric, and customer energy systems to achieve long-term climate goals nationalgridus

Electric Plan  Climate and Environmental Provisions

The electric rate plan supports New York’s Climate Leadership and Community Protection Act (CLCPA) objectives:

Electric Rate Plan Clean Energy Advancement:

• Renewable Energy Integration: Enhanced grid capabilities to support solar, wind, and energy storage interconnection nationalgridus
• Electric Vehicle Infrastructure: Support for EV charging infrastructure deployment dps.ny
• Grid Modernization: Smart grid investments to improve efficiency and enable distributed energy resources dps.ny
• Energy Storage: Support for battery storage system interconnection and operation nationalgridus

Electric Rate Plan Environmental Justice:

• Enhanced programs in disadvantaged communities dps.ny
• Environmental justice considerations in infrastructure planning dps.ny
• Community engagement and liaison programs dps.ny

Solar and Renewable Energy Support

The order includes specific provisions to support renewable energy development:

Solar Industry Benefits:

• Reduced interconnection costs for solar and energy storage projects nationalgridus
• Streamlined interconnection processes nationalgridus
• Support for community solar program expansion nationalgridus

Grid Modernization for Renewables:

• Enhanced grid capacity to accommodate distributed energy resources nationalgridus
• Smart grid technologies to manage two-way power flows nationalgridus
• Energy storage integration capabilities nationalgridus

However, when I asked how much these projects would cost, I was disappointed. 

Based on the comprehensive review of the New York PSC orders for cases 24-E-0322 and 24-G-0323, the approved rate plans do not contain explicit breakdowns of specific dollar amounts or percentages of the rate increases allocated specifically to Climate Leadership and Community Protection Act (CLCPA) projectsand state mandated programs. However, several important findings emerge from the analysis: documents.dps.ny

Lack of Specific CLCPA Cost Allocation

The joint proposal and supporting documents do not provide a detailed breakdown showing what portion of the approved rate increases is specifically attributed to CLCPA compliance costs versus traditional reliability, safety, and maintenance investments. This represents a significant gap in transparency regarding climate-related cost allocation to ratepayers. documents.dps.ny

CLCPA-Related Investments Identified

While specific cost breakdowns are not provided, the orders identify several CLCPA-related investment categories within the approved rate plans:

Electric System CLCPA Investments

Transmission Infrastructure:

• CLCPA Phase 2 Transmission Projects: The joint proposal specifically mentions CLCPA Phase 2 projects and includes a provision allowing National Grid to petition for 100% Construction Work in Progress (CWIP) treatment for these projects documents.dps.ny
• Smart Path Connect: National Grid’s share of capital investment totaling $550 million, which includes rebuilding approximately 55 miles of transmission circuits to support renewable energy transmission nationalgrid
• Grid Modernization: Investments to support distributed energy resources and renewable energy interconnection dps.ny+1

Distribution System Enhancements:

• Enhanced grid capabilities for solar, wind, and energy storage interconnection nationalgridus
• Smart grid technologies to manage intermittent renewable resources nationalgridus
• Electric vehicle infrastructure support programs dps.ny

Gas System CLCPA-Related Programs

Emissions Reduction Programs:

• Leak detection and survey programs to reduce methane emissions nationalgrid+1
• Leak-prone pipe replacement programs dps.ny
• Remote methane detection programs nationalgrid

Alternative Energy Programs:

• Non-Pipeline Alternatives (NPAs): Enhanced programs to provide alternatives to traditional gas infrastructure expansion dps.ny+1
• Renewable Natural Gas (RNG) Support: Proposals to connect four renewable natural gas projects nationalgrid
• Electrification Programs: Support for heat pump installations and customer electrification options documents.dps.ny

Historical CLCPA Investment Context

Previous utility filings and planning documents provide context for CLCPA-related costs across New York utilities:

Statewide CLCPA Transmission Investments:

• Phase 1 Projects: Approximately $4.16 billion in transmission investments and $2.64 billion in distribution investments across all New York utilities nyserda.ny
• Phase 2 Conceptual Estimates: $7.62 billion in transmission and $2.16-$2.85 billion in distribution investments (conceptual estimates) nyserda.ny

National Grid’s Historical CLCPA Share:

• Phase 2 Transmission: $1.37 billion estimated for National Grid transmission projects nyserda.ny
• Phase 2 Distribution: $510 million to $1.2 billion estimated for National Grid distribution projects nyserda.ny

Ratepayer Cost Burden Context

The New York State Comptroller’s office has identified that ratepayers have contributed almost $2.6 billion to the Clean Energy Standard (CES) program from 2016 through 2021, with most CLCPA and CES program funding being ratepayer-based rather than state-funded. osc.ny

Transparency Gap

The lack of specific cost allocation for CLCPA compliance in the 24-E-0322 and 24-G-0323 orders represents a significant transparency issue for ratepayers. While the orders acknowledge that investments support CLCPA goals and include various climate-related programs, they do not quantify:

• What percentage of the $708 million total three-year electric revenue increases is for CLCPA compliance dps.ny
• What percentage of the $194 million total three-year gas revenue increases is for CLCPA compliance dps.ny
• How much ratepayers are specifically paying for state climate mandates versus traditional utility infrastructure needs

This lack of detailed cost allocation makes it difficult for ratepayers and stakeholders to understand the true cost burden of New York’s climate policies versus traditional utility service obligations.

Hochul Response

The press release included a quote from Governor Hochul.

Governor Kathy Hochul made it clear the original rate proposal was too high. At Governor Kathy Hochul’s direction, the Department of Public Service, the staff arm of the Commission, scrutinized National Grid’s rate case to prioritize affordability. It’s the Commission’s responsibility to find the right balance between the resources needed to ensure system reliability and minimize costs to ratepayers. The Commission believes these agreements found the best possible path forward in this case.

Discussion

The point that I am trying to make in conjunction with other like-minded individuals is that Hochul’s public statements related to the Climate Act ignore reality.  She doesn’t acknowledge the impact of her state policies on the rate cases and has covered up expected costs of the net-zero transition.  To be credible the state must establish specific affordability, reliability, and environmental impact criteria, set up a tracking mechanism for each, and formulate a mandatory course of action when the criteria are exceeded.  Of course, these are bright line accountability metrics, and no political supporter of the Climate Act wants to admit their role in the New York affordability crisis.

Conclusion

I believe that the crisis facing NMPC customers is not from the changing climate, but rather the irrevocably flawed climate policy, especially as it relates to affordability.  I agree with the Perplexity recommendation in response to my queries:

Given the substantial ratepayer costs associated with CLCPA compliance and the public interest in transparency, future rate proceedings should include detailed cost allocation showing specific dollar amounts and percentages of rate increases attributed to:

• Climate Act transmission and distribution projects
• Climate-related operational programs
• State-mandated environmental compliance
• Traditional reliability and safety investments

This would provide ratepayers with clearer understanding of how their utility bills are being allocated between climate policy implementation and traditional utility service provision.