Massachusetts
Gas:
2020 Rate Case Filing
Investor Relations | November 2020
"With this filing, National Grid is proposing greater system investments and forward-thinking heating solutions aligned with our commitment to provide fairer, cleaner, and affordable gas service to our customers."
Marcy Reed
National Grid President for Massachusetts
National Grid and Massachusetts Gas
- Massachusetts Gas distribution companies (Boston Gas and Colonial Gas)
Gas
- Over 900,000 gas customers
- Over 1,300 employees in Massachusetts
- Over 11,000 miles of gas mains
- Regulated by Massachusetts Department of Public Utilities
Meeting our commitments . . .
. . . since the last rate case in 2018
- Capital investments of more than $1.6bn to modernize the networks
- Replaced 421 miles of leak prone pipe since 2018, with an additional 141 miles expected in 2021
- Investing at significantly increased levels in the area of gas growth to connect new customers and increase supply to existing customers
Key elements of 2020 rate case filing
Revenue request | |
Mass Gas revenue increase1 | $138m |
1 Not including the existing recovery of $82m of leak prone pipe investment which is currently recovered via our capital tracker (GSEP). Recovery will be mov ed from the capital tracker to base rates as part of the filing.
- Requested ROE of 10.5%
- Requested debt/common equity structure of 46.6%/ 53.4%
- Additional annual revenue to cover increased operating costs and investments
- Filing includes a Performance Based Rate Mechanism (PBRM)
- 5 year rate plan (October 2021 to October 2026)
- Filing supports capital investment of approximately
$285m annually
(Note: Leak prone pipe investments are recovered under separate mechanisms)
- Incremental operating expense of $94m
- Requesting an incremental 209 FTEs to meet our work plans over the next five years
- Proposing $50m dollars of innovative investments focused on decarbonizing our gas network
- New rates expected from October 1, 2021
Financing assumptions
Weighted | Assumed | |||
Cost of | Cost of | average cost | equity | |
equity | debt | of capital | capitalization | |
MA Gas | 10.5% | 3.86% | 7.41% | 53.4% |
Customer impact
Typical residential gas heating customers will see an average net bill increase of approximately:
Boston | $122 annually or 9.0% |
Former Colonial $107 annually or 9.5%
Opex
$94m increase reflects:
- $59m in labor, benefits and other core O&M
- $19m in incremental FTEs
- $3m increase in property taxes
- $13m increase in income and payroll taxes
Revenue increase ($m)
160
3 | 13 | (20) | ||||||||
Other | ||||||||||
19 | Property | |||||||||
Revenue | ||||||||||
Taxes | Taxes | |||||||||
120 | Growth | |||||||||
59 | FTEs | |||||||||
Rate | $138m |
80 Base/ Return
64 O&M
40
0
Capex
- Filing supports the capital investment of approximately $285m annually
- Rate Base to be updated to include all investments through March 2020
2019/20 RoE/Rate base ($m)
Rhode Island
Electric 11.9%
FERC | Mass | Rhode Island | |||
Gas 8.8% | |||||
Elec | |||||
11.4% | KEDLI | NiMo Gas 8.7% | |||
NiMo Electric | |||||
10.3% | 9.7% | ||||
Mass | |||||
8.9% | |||||
Gas | KEDNY | ||||
7.8% | 7.7% | ||||
$0 | $25.6bn |
Timetable | Previous agreement | |||||||
November 2020 | Proposal filed | Equity/Debt | Allow ed | FY20 Achieved | ||||
(%) | RoE | RoE | ||||||
Spring / Early Summer 2021 | Evidentiary Hearings | |||||||
Mass Gas | 53/47 | 9.5 | 7.8% | |||||
Late September 2021 | Commission order | |||||||
October 2021 | New rates effective | |||||||
Rate Case / Regulatory History
2018 Last rate case was effective October 1, 2018, and based on a historic test year of calendar year 2016. The 2018 rate case increased base distribution rates, included recovery of Gas Business Enablement program, funding to modernize IT infrastructure that supports our core gas distribution operating capabilities and recovery
of incremental FTE's for enhanced gas main replacement, repair work and overtime reduction.
2015 On April 30, 2015 the Massachusetts DPU issued an order implementing a new recovery mechanism for leak- prone natural gas pipeline outside of base rates
Important notice
Thisdocument contains certain statements that are neither reported financial results nor otherhistorical information. These statements are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include information with respect to National Grid'sfinancial condition, its results of operations and businesses, strategy, plans and obj ectives.Words such as 'aims','anticipates', 'expects', 'should', 'intends', 'plans', 'believes', 'outlook', 'seeks', 'estimates', 'targets', 'may', 'will', 'continue', 'proj ect' and similar expressions, as well as statements in the future tense, identify forward-looking statements. Furthermore, this
document, which is provided for information only, does not constitute summary financial statements and does not contain sufficient information to allowfor as full an understanding of the results and state of affairs of National Grid, including the principal risks and uncertainties facing National Grid, as would be provided by the full Annual Report and Accounts, including in particular the Strategic Report section and the 'Risk factors' section on pages 227 to 230 of National Grid's most recent Annual Report and Accounts for the year ended 31March 2020 as updated byNational Grid's unaudited half-year financial information forthe six months ended 30 September 2020, published on 12 November 2020. Copiesof the most recent AnnualReport
and Accounts are availableonline at www.nationalgrid.comor from EquinitiLimited. Except as maybe required bylawor regulation, NationalGrid undertakes no obligation to update anyof its forward-looking statements, which speak onlyas of the date of this document. The content of anywebsite references herein do not formpart of this document.
Further information | ||||
Nick Ashworth | James Flanagan | Peter Kennedy | ||
Director of Investor Relations | Investor Relations Manager (US) | Investor Relations Manager | ||
T +44 (0) 20 7004 3166 | T | +44 (0) 20 7004 3129 | T | +44 (0) 20 7004 3169 |
M +44 (0) 7814 355590 | M | +44 (0) 7970 778952 | M | +44 (0) 7966 200094 |
nicholas.ashworth@nationalgrid.com | james.flanagan2@nationalgrid.com | peter.kennedy@nationalgrid.com | ||
Jon Clay | Caroline Dawson | |||
Investor Relations Officer | Investor Relations Manager | @Grid_Media | ||
T +44 (0) 20 7004 3460 | T | +44 (0) 20 7004 3172 | ||
M +44 (0) 7899 928247 | M | +44 (0) 7789 273241 | ||
jonathan.clay@nationalgrid.com | caroline.dawson@nationalgrid.com | investors.nationalgrid.com |
National Grid plc 1-3 Strand
London WC2N 5EH United Kingdom
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original document
- Permalink
Disclaimer
National Grid plc published this content on 16 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 November 2020 07:06:07 UTC