What Happened To National Grid In Rhode Island?

National Grid is an electricity and natural gas utility company that serves over 20 million customers across New York, Massachusetts, and Rhode Island, among other regions in the United States. In Rhode Island, National Grid was the sole distributor of electricity for over 500,000 customers until its divestiture in 2022 (Source).

In recent years, National Grid came under scrutiny in Rhode Island for allegations of mismanagement, unexpected rate increases, and poor customer service. This culminated in 2019 when the Rhode Island Public Utilities Commission launched an investigation and ultimately imposed a $76 million penalty on the company for failing to maintain proper gas infrastructure (Source). The controversies led the state to force National Grid to sell its Rhode Island electric operations in 2022.

Allegations of Mismanagement

In recent years, National Grid has faced a number of allegations related to mismanagement of its operations in Rhode Island. Many of these accusations centered around the company’s poor response to power outages and inadequate vegetation management, which critics say have led to prolonged outages.

According to reporting by The Providence Journal, residents in Tiverton experienced frequent and lengthy power outages in 2021 due to trees falling on power lines. Town officials accused National Grid of failing to properly trim trees near power lines. The company pledged to improve vegetation management, but residents remained frustrated.

During a major storm in October 2021, over 120,000 National Grid customers lost power across Rhode Island. Critics said the company was too slow to respond and could have staged more crews in preparation. The outages prompted the Public Utilities Commission to launch an investigation into National Grid’s storm response.

Complaints have also emerged about National Grid failing to communicate accurate estimates for power restoration during outages. After Tropical Storm Isaias in 2020, the company faced a $435,000 fine from state regulators for providing unreliable outage estimates to customers.

Consumer Complaints

Residents and businesses in Rhode Island have filed numerous complaints against National Grid in recent years. According to the Rhode Island Public Utilities Commission, there were over 1,300 complaints lodged against the company in 2021 alone. The most common grievances involved inaccurate billing, poor customer service, and lengthy power outages.

Customers have accused National Grid of overcharging on their utility bills and then failing to adequately respond to billing disputes. According to data from the Attorney General’s office, the company received over 500 billing complaints in 2020. Some customers claimed their bills doubled or tripled for no apparent reason.

There have also been widespread critiques of National Grid’s customer service operations. Reviews on ConsumerAffairs.com chronicle extremely long wait times when contacting the company by phone, disproportionate fees and deposits, and a lack of accountability when problems arise.

Meanwhile, Rhode Islanders dependent on National Grid for electricity and gas service have endured an increasing number of power outages in recent years. The company blamed storms and equipment failures, but customers asserted that better infrastructure investment and maintenance could have prevented many of the interruptions.

State Investigation

In May 2022, the Rhode Island Public Utilities Commission (RIPUC) opened an investigation into National Grid’s management of the Rhode Island Renewable Energy Growth (RICAP) program after allegations surfaced of improper invoicing and mismanagement by the utility company [1].

The RIPUC conducted extensive hearings and took testimony from National Grid representatives regarding the company’s oversight and administration of the RICAP program. Key areas of concern included inaccurate and delayed customer invoicing, unauthorized transfers of ratepayer funds, and deficiencies in internal financial controls [2].

In February 2023, the RIPUC released an investigative report detailing National Grid’s mismanagement of the RICAP program and outlining recommendations to improve oversight, accountability, and transparency going forward. The investigation uncovered over $127 million in improper charges to Rhode Island ratepayers [1].

Financial Penalties

State regulators imposed several financial penalties on National Grid in response to its mismanagement in Rhode Island. In January 2019, The Rhode Island Public Utilities Commission ordered the company to give customers a $32 million rate credit to make up for poor service during a 2018 gas outage that left thousands of homes and businesses without heat.

The credit amounted to a 17% rate cut for all gas customers in the state. National Grid was also fined $750,000 for the gas crisis, one of the largest fines ever imposed by state regulators. According to the Rhode Island Public Utilities Commission, the utility showed a “lack of preparation” ahead of a winter storm that triggered the outages.

The Massachusetts Department of Public Utilities issued an additional $7.5 million fine against National Grid in 2019 for its bungled response to a series of storms and gas overpressurization incidents in Massachusetts (Boston Globe).

Besides the fines, National Grid agreed to a moratorium on rate increases in Rhode Island until 2022 as a condition of its merger with Narragansett Electric. This freeze provided important consumer relief at a time when many were demanding accountability from the utility giant.

Company Response

National Grid responded to the allegations and complaints in several ways. The company issued a statement saying “We recognize the complexities inherent in the evolution of the energy industry in Rhode Island…We appreciate the constructive feedback from customers and regulators in Rhode Island and remain committed to delivering safe and reliable energy” (National Grid Statement).

National Grid also committed to improving communication with customers and pursuing infrastructure upgrades in Rhode Island. The President of National Grid’s Rhode Island operations, Tim Horan, said “We understand the importance of prioritizing infrastructure investments that provide safe, reliable energy and we’ll continue partnering with policymakers and regulators to shape Rhode Island’s clean energy future while meeting our customers’ expectations” (RIPUC Docket).

While not directly admitting fault, National Grid acknowledged shortcomings in customer service and infrastructure maintenance that contributed to the allegations. The company pledged improvements and cooperation with regulators going forward.

Infrastructure Upgrades

In response to the issues outlined earlier, National Grid has committed to significant infrastructure upgrades in Rhode Island. The company announced plans in 2015 for $150 million in gas and electric infrastructure improvements over three years (1). Upgrades focused on replacing old gas lines, improving the electric distribution system, and vegetation management to reduce outages.

National Grid continues to invest in infrastructure upgrades in Rhode Island. In 2021, the company highlighted progress on $93 million of critical electrical upgrades in downtown Providence to improve reliability (2). Upgrades have included replacing transformers, network protectors, and oil circuit breakers. Vegetation management has also been a priority, with tree wire projects and right tree-right place initiatives.

Legislative Action

In response to ongoing issues with National Grid’s management of the electric system in Rhode Island, state legislators passed new laws and regulations aimed at improving accountability and service. In July 2019, the Rhode Island General Assembly passed the Comprehensive Energy Conservation, Efficiency and Affordability Act, which included several provisions impacting National Grid.

The legislation established new renewable energy and energy efficiency goals that National Grid must meet through its 3-Year Plans submitted to the Rhode Island Public Utilities Commission. It also expanded the PUC’s oversight authority to ensure National Grid makes adequate infrastructure investments and provides reliable electric service.

Additionally, the PUC gained the ability to levy stiffer penalties against National Grid for violations of regulations. The law imposed new requirements for National Grid to improve communication with customers during outages. It also mandated the creation of performance metrics tied to executive compensation to incentivize better management.

Ongoing Issues

The current relationship between National Grid and Rhode Island still faces some lingering challenges, despite recent efforts to improve things. In July 2019, the state passed legislation that led to the creation of Rhode Island Energy, a new locally-focused utility taking over National Grid’s gas and electricity business in the state (Rhode Island Energy, n.d.). This transition aimed to address long-standing complaints about poor customer service and infrastructure problems under National Grid’s management.

However, the changeover has not been seamless. There are still periodic customer complaints about billing errors and service problems as the new utility gets up and running (RIPUC, n.d.). Rhode Island Energy has pledged to address these issues through better communication, infrastructure upgrades, and a focus on reliable energy delivery. But rebuilding public trust after years of perceived neglect under National Grid remains an ongoing process.

Additionally, while the state levied significant financial penalties and mandated infrastructure investments from National Grid, analysts say it will take years to fully upgrade old and unreliable gas pipelines and electrical systems across Rhode Island. Rhode Island Energy now oversees these long-term infrastructure projects, but supply disruptions and energy costs are still concerns for many customers as the work continues.

In summary, creating a new utility helped address Rhode Island’s frayed relationship with National Grid. But providing consistent, affordable energy while renewing public confidence remains a work in progress for Rhode Island Energy as it aims to turn the page on past grievances. Careful oversight and transparent communication will be key to resolving any lingering issues going forward.

Conclusion

National Grid’s actions in Rhode Island have resulted in significant controversy and consumer backlash over the past few years. The utility company faced allegations of mismanagement, complaints of poor customer service, and claims of failing infrastructure. This prompted state investigations and the imposition of major financial penalties.

In response, National Grid has pledged investments into upgrading Rhode Island’s gas and electric systems. However, tensions still remain due to continued rate hike requests and fears of inadequate preparation for future severe weather events. It’s clear there is still work to be done to fully restore public and regulatory trust in National Grid’s Rhode Island operations.

While the company has faced substantial criticism, National Grid has shown a willingness to invest in improvements. With transparent communication, follow-through on infrastructure commitments, and improved customer service, National Grid will hopefully be able to rebuild its reputation and provide reliable energy to Rhode Island homes and businesses into the future.