National Grid gets OK for Massachusetts changes

3rd Nov 2010 07:32

Power grid operator National Grid's request to whack up prices for its gas distribution business in Massachusetts, USA, has been given the thumbs up by the local authorities.The Massachusetts business represents around one-tenth of National Grid's US operations.The approval from the Massachusetts Department of Public Utilities (MADPU) of National Grid's request should result in a $58m increase in revenues. As part of the revenue requirement, the MADPU approved a return on common equity of 9.75%, as well as a common equity ratio of 50%.The MADPU has also approved a revenue decoupling mechanism for all customer classes, providing National Grid the opportunity to recover lost base revenue resulting from customer-driven energy efficiency and other conservation measures which are negatively affecting sales volumes.A capital investment tracker designed to provide annual recovery of capital costs incurred to replace aging cast iron and bare steel mains remaining in the Massachusetts distribution system, has also been approved."Although the MADPU decision reflects several adjustments to National Grid's initial proposals, the collective impact of the decision represents a positive step forward for National Grid's Massachusetts gas distribution operations," the company said.