Watertown Daily Times | National Grid charges to fall in New York in January

Homeowners will see a 7 percent to 8 percent drop in their National Grid electricity bills, and business owners will pay 10 percent to 40 percent less in January, if rate changes are approved by the state Public Service Commission.

The change will come because the public utility no longer will be allowed to collect a competitive transition charge under the rate structure approved by the commission in January. Ratepayers will fork over $545 million for the charge in 2011, which covers losses from Niagara Mohawk ending contracts with independent power plants and selling nuclear power plants.

But ratepayers will not see all of that savings; the utility has asked to collect $239 million in deferred costs from unexpected increases in pensions, environmental cleanup and storm costs based on the utility's rates from 2002. The original rate structure was set when National Grid and Niagara Mohawk Power Corp. merged and was updated in rates approved in January.

"We recognize these are rather challenging times, so we said, 'Let's not collect this all at once; let's spread it out over 15 months,'" National Grid spokesman Stephen F. Brady said.

If the commission approves that, the collection will end in March 2013 and the utility will collect $413 million less per year.

"The net result is that all customers on the delivery side of the bill, assuming equal usage to this year, will see an overall bill decrease," Mr. Brady said.

The average residential customer will see an 11 percent to 12 percent decrease in delivery charges, or 7 percent to 8 percent overall, he said. Commercial customers have several different classes, so smaller commercial ventures, including gas stations and offices, will see about a 21 percent decrease in delivery charges, or 11 percent to 12 percent overall. Larger commercial ventures, including hospitals and factories, will see a 20 percent to 50 percent decline in delivery charges, or 10 percent to 40 percent overall.

The last rate change took 11 months in the approval process, but this change, based on a compliance filing, could be decided before 2012.