National Grid Reduces Rate Hike Request, Cites Tax Law
National Grid will seek a smaller rate hike in Massachusetts than it originally requested, the utility company said Thursday, citing the benefit of the recent federal tax reform bill.
The company announced that it will reduce its proposed rate hike for Bay Staters by $36 million — from a total increase of $87 million to $51 million — due to unexpected savings the company is now expecting to see as a result of the federal corporate tax rate dropping from 35 percent to 21 percent.
"We are committed to ensuring that the tax savings of the legislation are fully realized and are used to help our customers in their energy bills," Cordi O’Hara, president and COO of National Grid in Massachusetts, said in a statement. "We’ll continue to seek opportunities to provide this benefit to all of our customers."
National Grid said it does not yet know exactly how the changed proposed rates will affect customers' bills, but did say the change will "result in smaller impacts than originally proposed and will vary across rate classes and customer usage."
The utility filed a natural gas distribution rate proposal with the Department of Public Utilities in November, its first since 2009, the company said, and will now update that proposal with DPU to reflect the changes announced Thursday. National Grid announced similar rate hike reductions on New York and Rhode Island.
Last week, Eversource announced that it will lower its existing rates for eastern Massachusetts by $35.4 million, along with a smaller hike of $16.5 million for its customers in the western part of the state.
On Wednesday, U.S. Senate Majority Leader Mitch McConnell, who was key in shepherding the tax bill through Congress, tweeted that the benefits of the GOP-backed bill have already been realized in states like Massachusetts.
"Major power companies in #Illinois, #Maryland, and #Massachusetts are already proposing plans to give their customers tens of millions of dollars — or hundreds of millions of dollars – in relief by lowering the rates they charge for #energy. All thanks to #TaxReform," the Kentucky Republican tweeted.