Massachusetts
Gas:
2021 Rate Case Order
Investor Relations | October 2021
"We remain focused on balancing an economically viable pathway to decarbonization while ensuring the safety and compliance of our existing system. With this order, National Grid commits to greater system investments, aligned with our commitment to provide fairer,
cleaner, and more affordable gas service to our customers.
"
Stephen Woerner
National Grid President for New England
National Grid and Massachusetts Gas
- Massachusetts Gas distribution companies (Boston Gas and Colonial Gas)
Gas
Key elements of 2021 rate case order
Revenue | |
Mass Gas revenue increase1 | $72m |
1 Not including the existing recovery of $72m of leak prone pipe investment which is currently recovered via our capital tracker (GSEP). Recovery will be moved from the capital tracker to base rates as part of the filing.
- Allowed ROE 9.7%
- Debt/common equity structure of 46.6% /53.4%
- Additional annual revenue to cover increased operating costs and investments
- Order includes a Performance Based Rate Mechanism (PBRM), with an I-x formula (where I=inflation, x= productivity factor)
- 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
- 5 year rate plan (October 2021 to October 2026)
- Order supports capital investment of approximately
$267m annually
(Note: Leak prone pipe investments are recovered under separate mechanisms)
- Incremental operating expense of $65m
- Incremental 133 FTEs to meet our work plans over the next five years
- New rates effective from October 1, 2021
Financing assumptions
Weighted | Assumed | |||
Cost of | Cost of | average cost | equity | |
equity | debt | of capital | capitalization | |
MA Gas | 9.7% | 3.86% | 6.98% | 53.4% |
Customer impact
Average residential heating increase of approximately 8% for Boston Gas and 10% for former Colonial Gas 2.
2 Increase based on information provided by DPU in its order. Final customer bill impacts will be presented in the Company's compliance filing to be submitted in mid- October.
Opex
$65m increase reflects:
- $42m in labor, benefits and other core O&M
- $6m in incremental FTEs
- $10m in property taxes
- $7m increase in income and payroll taxes
Capex
- Order includes capital investment of approximately $267m annually
- Rate Base to be updated to include all investments through March 2020, except GSEP
Revenue increase ($m) 120
100 | Other | Revenue | |||||||||||||
Property | Taxes | Growth | |||||||||||||
Taxes | 7 | ||||||||||||||
(22) | |||||||||||||||
80 | FTEs | 10 | |||||||||||||
O&M | |||||||||||||||
6 | |||||||||||||||
60 | |||||||||||||||
$72m | |||||||||||||||
Rate | 42 | ||||||||||||||
40 | Base/ | ||||||||||||||
Return |
20 29
0
Rate Case / Regulatory History 2019
2018
2020/21 RoE/Rate base ($m) | |||||
Rhode Island Electric 10.0% | |||||
FERC | NiMo Gas 7.2% | ||||
11.2% | KEDLI | Rhode Island Gas 6.9% | |||
8.2% | NiMo Electric | Mass | |||
KEDNY | Mass | ||||
Gas | |||||
6.3% | Elec | ||||
6.1% | |||||
5.7% | |||||
5.3% | |||||
$0 | $27.6bn |
2015
Important notice
This document contains certain statements that are neither reported financial results nor other historical 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's financial condition, its results of operations and businesses, strategy, plans and objectives. Words such as 'aims', 'anticipates', 'expects', 'should', 'intends', 'plans', 'believes', 'outlook', 'seeks', 'estimates', 'targets', 'may', 'will', 'continue', 'project' 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 allow for 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 236 to 239 of National Grid's most recent Annual Report and Accounts for the year ended 31 March 2021. Copies of the most recent Annual Report and Accounts are available online at www.nationalgrid.comor from Equiniti. Except as may be required by law or regulation, National Grid undertakes no obligation to update any of its forward-looking statements, which speak only as of the date of this document. The content of any website references herein do not form part of this document.
Nick Ashworth
Director of Investor Relations
- +44 (0) 20 7004 3166 M +44 (0) 7814 355 590 nicholas.ashworth@nationalgrid.com
Jon Clay
Investor Relations Officer
- +44 (0) 20 7004 3460 M +44 (0) 7899 928 247 jonathan.clay@nationalgrid.com
Angela Broad
Senior Investor Relations Officer
- +44 (0) 7825 351 918 angela.broad@nationalgrid.com
Caroline Dawson
Investor Relations Manager
- +44 (0) 20 7004 3172 M +44 (0) 7789 273 241 caroline.dawson@nationalgrid.com
James Flanagan | ||
Investor Relations Manager (US) | ||
T | +44 (0) 20 7004 3129 | |
M | +44 (0) 7970 778 952 | |
james.flanagan2@nationalgrid.com | ||
Peter Kennedy | ||
Investor Relations Manager | @Grid_Media | |
T | +44 (0) 20 7004 3169 | |
M | +44 (0) 7966 200 094 | |
peter.kennedy@nationalgrid.com | investors.nationalgrid.com |
National Grid plc 1-3 Strand London WC2N 5EH United Kingdom
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National Grid plc published this content on 04 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 October 2021 06:22:39 UTC.