By Tyson Slocum
Today in Federal Energy Regulatory Commission docket CP16-121-001, Public Citizen challenges a more than $200 million rate hike by National Grid LNG. On April 15, National Grid LNG filed an application to amend its certificate of public convenience and necessity “to reflect substantial increases in the estimated cost of construction and” other “increased costs” for its Fields Point Liquefaction facility in Providence, Rhode Island. FERC did not notice this filing in the federal register until April 26.
Exhibit K of the Application shows a 117% increase in construction costs, from $180.3 million to a staggering $390.8 million. Exhibit N shows that the total cost of service and revenue will increase by 74%, with the cost of service and revenue spiking from $47 million to a whopping $82 million in year one. Exhibit N then estimates that National Grid LNG will earn a massive financial windfall as a result of these cost overruns, with its financial return to shareholders jumping 117% from $14.8 million to $32.2 million in year one.
The National Grid LNG facility’s rates are charged to two of its wholly-owned “affiliated storage customers, Narragansett and Boston Gas”, which in turn have hundreds of thousands of captive household customers that will be responsible for paying National Grid LNG’s filed rates―including these unprecedented and unsubstantiated increases. Thousands of National Grid’s customers are enduring energy poverty from spiking energy prices that are driving punishing inflation after already suffering from economic hardship under the COVID pandemic, and cannot afford yet another rate increase.
These cost overruns and 117% increase in National Grid’s financial returns to its shareholders are not just and reasonable. The cost overruns and more than doubling of National Grid’s financial return are unsupported by the application, and so the Commission must set this matter for hearing to allow intervenors an opportunity for discovery.
Finally, FERC provided public interest intervenors a mere three days to prepare for this filing. FERC did not provide public notice in the federal register of National Grid LNG’s April 15 application until April 26―giving us three days until the April 29 deadline to read it and prepare some sort of response. This absurdly abridged timeline is aggravated by the fact that public interest intervenors face significant resource challenges to effectively cobble together an analysis and protest. Our strained resources are in sharp contrast to National Grid LNG, which is authorized to recover all of its FERC filing-related expenses from ratepayers. As a result, we request that the Commission require National Grid LNG to itemize and detail all legal, administrative and any other expenses related to this proceeding that National Grid LNG plans to recover from ratepayers.
Read the two-page filing here: NatGridLNG