BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced on Wednesday that her office is requesting the Department of Public Utilities reject National Grid's $104 million rate hike request for its three local gas distribution subsidiaries.
National Grid's request would be the largest gas distribution rate increase in state history. Coakley is seeking a full audit of National Grid expenses, which she hopes will lead to further cost reductions.
In August, Coakley says she identified cuts and inappropriate employee reimbursement costs in a filing made with the DPU.
In response to her inquiry, National Grid has agreed to remove approximately $1.5 million in expenses from its cost of service.
These costs include stopping a special shipment of a National Grid executive's wine collection from Great Britain to the United States, paying for executives to attend the presidential inauguration and other political activities, and halting tuition that would send the children of a National Grid executive to an exclusive British private school.
"National Grid has removed many of the inappropriate expenses that we uncovered in our review, but those costs only scratch the surface," Coakley said.
"We believe that National Grid has attempted to pass on millions in unnecessary costs to Massachusetts consumers and businesses. We also continue to ask for a complete audit of National Grid's expenditures which may ultimately lead to further reductions for consumers."
Coakley alleges there could be inappropriate employee reimbursements and alleges that a full audit could reveal as much as $100 million in costs that should have been allocated to National Grid's New York, New Hampshire and Rhode Island subsidiaries, rather than to Massachusetts customers.
The DPU must issue a ruling on the rate hike request by November 1, 2010.
National Grid provides gas distribution service to over 850,000 residential, commercial and industrial customers in Massachusetts. National Grid USA operates three gas distribution subsidiaries in Massachusetts - Boston Gas Company, Essex Gas Company and Colonial Gas Company.