PROVIDENCE, R.I. (WPRI) – National Grid announced Thursday it will reduce its proposed rate hike for Rhode Islanders by more than $25 million largely due to expected savings from the new federal tax law.
The utility had been seeking an estimated 6% increase in electric bills and a 5% increase in gas bills, which combined were expected to increase ratepayers’ bills by about $71 million annually starting Sept. 1. It would be the company’s first increase in base distribution rates since 2012.
National Grid says the new law, which slashed the federal corporate tax rate from 35% to 21%, will now allow it to reduce the hike to about $45 million when combined with other recalculations. The R.I. Public Utilities Commission had asked the company last month to revisit its request in light of the federal changes.
“Today’s announcement is a key indicator of how this new tax law can provide real benefits to National Grid’s customers,” Tim Horan, National Grid’s president and chief operating officer in Rhode Island, said in a statement. “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.”
The company said it was still determining how much the average ratepayer’s gas or electric bill will go up under the reduced proposal. Any change to rates will still require approval from the PUC following a lengthy hearing process.
In a statement, the Division of Public Utilities and Carriers said it “welcomes” the announcement by National Grid.
“The Division will independently analyze the impact of the changes in new tax law on the revenue request from National Grid and endeavor to ensure, in partnership with the Public Utilities Commission and National Grid, that the maximum value be returned to ratepayers,” the statement said.
Rhode Island is one of a growing number of states where the tax law is reducing utility bills. In Massachusetts, Eversource announced last week it would reduce rates statewide to pass along some of its millions of dollars in tax savings to customers. Pepco made a similar announcement this week in Washington, D.C.
Gov. Gina Raimondo – who, like all prominent elected Democrats in Rhode Island, opposed passage of the new tax law – said she was “pleased” about National Grid’s decision and suggested the utility was “responding to my call to protect Rhode Island ratepayers.”
“Rhode Islanders deserve to get significant relief on their energy bills as a result of the massive tax cut that the President and Congress have given to large corporations like National Grid,” Raimondo said in a statement.
Lt. Gov. Dan McKee, a Democrat and frequent critic of National Grid, suggested in a letter last week that the PUC should also require Grid to recalculate the rates it is charging now, since savings from the tax law were scheduled to begin this month with the start of the new year.
“Knowing that the tax relief for National Grid began Jan. 1, then we should also be expecting that the rate relief for the ratepayers in the state of Rhode Island should be reflective as of Jan. 1,” McKee told Eyewitness News. “Currently I’m not seeing that.”
Republicans were quick to criticize Democratic leaders for failing to support the tax plan in light of National Grid’s announcement. State Rep. Bobby Nardolillo, a Republican running for U.S. Senate, tweeted: “Ok. Say It All Together. ‘Thank You President Trump.'”
R.I. Republican Party Chairman Brandon Bell made a similar argument, saying local Democrats “deserve zero credit for this rate reduction.”
“They didn’t even call on Grid to lower their rate increase because of tax reform until after the PUC made its request to the National Grid,” he said. “Instead of sending out silly statements claiming credit in some way for this rate reduction, they should just say thank you to the Republican Congress and President Trump for tax reform and admit that there will benefits to Rhode Islanders from tax reform.”
And Cranston Mayor Allan Fung, who is seeking the GOP nomination against Raimondo, suggested her statement revealed her “partisan and cynical approach to her job.” He added, “Less than a month from saying that she couldn’t think of a single thing she supported in the tax reform bill, she is trying to take credit for its positive impact on Rhode Island families.”
Jared Leopold, a spokesman for the Democratic Governors Association, soon fired back at Fung.
“Allan Fung has come out of hiding to admit he stands for President Trump’s policy agenda,” Leopold said. “These are the facts: middle-class Rhode Islanders will face a bigger tax hit because of the president’s tax giveaway to billionaires and special interests.” (A Tax Policy Center analysis found just 5% of Americans will pay more under the new tax law this year, though more than half will by 2027.)Ted Nesi (email@example.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook