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NY Installs Rate Freeze for Niagara Mohawk

NY Installs Rate Freeze for Niagara Mohawk

The New York State Public Service Commission has acted to either freeze or decrease the distribution portion of charges to natural gas customers of Niagara Mohawk Power through Aug. 31, 2003 as part of a multi-year rate and restructuring plan.

"Although the Commission and the utilities have no control over the price of natural gas on the national or international markets, the savings for some of Niagara Mohawk's delivery customers under this plan should help ease the impact, somewhat, of higher natural gas prices this winter," Commission Chairman Maureen O. Helmer said.

The Commission's order last week permanently implements a restructuring plan aimed at encouraging more competition in the company's service region, making it easier for its customers to shop for natural gas suppliers. Provisions of the rate plan had been approved in July and implemented on a temporary basis in August. The order puts it on a permanent basis, effective Oct. 28.

The "commodity" portion of bills will continue to reflect competitive market prices for natural gas in the United States and Canada.

Many residents and small businesses in Niagara Mohawk's service region already purchase their gas supplies from competitors, and have experienced decreases in the delivery charge portion of their bills from the utility as a result of the Commission's approval of the plan in July. About 22,170 of these customers will experience a 9-10% decrease in their annual bills to bring their delivery charge in line with the actual cost of delivering their gas. In addition to the rate-related provisions of the plan, other provisions require Niagara Mohawk to:

_ More clearly delineate on bills the actual costs of its various gas services to allow customers to more easily comparison shop for new competitive suppliers;

_ Provide grants to counties in its service territory to develop gas "aggregation" programs for low-income customers;

_ Undertake a consumer education program employing a variety of approaches to inform consumers about their ability to purchase gas from nonutility, competitive suppliers;

_ Implement advanced-technology maintenance programs to extend the useful life of its underground distribution mains; and;

_ Meet specified customer service quality and gas safety and reliability targets or pay financial penalties in the form of credits to customers if it does not do so.

Niagara Mohawk Power Corporation serves approximately 545,600 natural gas customers in a wide upstate service region that extends from the state's borders with Canada and Pennsylvania to its border with New England and north throughout the Adirondack Region.

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