The Commission approved the Companies’ current rate plans in its Order Approving Joint Proposal, as Modified, and Imposing Additional Requirements issued August 12, 2021 (Rate Order) in Cases 19-G-0309 and 19-G-0310. The Rate Order allows the Companies to defer the financial impact of new legislation, rules or orders. The Companies recently deferred for ratemaking purposes certain types of fees under this provision. However, due to certain timing differences, these regulatory accounting deferrals cannot be reflected in its financial statements under GAAP.

The Companies has deferred, for regulatory purposes, unbilled late payment and related fees for the period March 2020 through December 2021. These fees, $12.840 million for National Grid NY and $5.925 million for National Grid, are part of the unanticipated financial impact that resulted from the State’s necessary orders, issued to address the COVID-19 pandemic.

Under GAAP, the Companies may only record the deferral on its income statement if the Companies will be recovering it within 24 months from the end of the annual period in which it was recognized. In order to record the deferral on its financial statements, the Companies must recover the deferral by the end of 2022. The Companies propose to establish a surcharge/surcredit recovery mechanism that permits full recovery/refund of any applicable deferred fees within GAAP’s recording timeframe.

For the Rate Year 1 (April 1, 2020 through March 31, 2021) fee deferral, the Companies proposes to begin recovery in July 2022 and end in June 2023. For the Rate Year 2 (April 1, 2021 through March 31, 2022) fee deferral, the Companies propose to begin recovery (as a surcharge) or return to customers (as a surcredit) in July 2023 and end in June 2024. For the Rate Year 3 (April 1, 2022 through March 31, 2023) fee deferral, the Companies propose to begin recovery or return to customers in July 2024 and end in June 2025. The Companies state that they are open to alternative recovery/return periods that are within the GAAP requirements.

The full text of the petition and the full record of the proceeding may be reviewed online at the Department of Public Service web page: www.dps.ny.gov. The Commission may adopt, reject or modify, in whole or in part, the action proposed and may resolve related matters.

Statements and analyses are not submitted with this notice because the proposed rule is within the definition contained in section 102(2)(a)(ii) of the State Administrative Procedure Act.

(19-G-0309SP3)