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Investing.com -- National Grid (LON:NG) has submitted a joint proposal for its NY Upstate electric and natural gas distribution unit, Niagara Mohawk Power Corporation (NIMO). NIMO constitutes 15% of NG’s group-regulated asset base and 30% of its U.S. operations.
The proposed settlement outlines the regulatory structure for a three-year period from May 2025 to March 2028, featuring an allowed return on equity of 9.5%. This figure represents a slight decrease from NG’s initial request of 10%.
However, it’s worth noting that the new proposed return is an increase from the prior allowed one of 9%, under which National Grid managed to achieve returns on equity between 6% and 8.1% for 2023/24.
The regulatory proposal also incorporates a capital expenditure (capex) of $1.43 billion for electricity and $351 million for gas during the first-rate year. This permitted capex is equivalent to 90% of the expenditure requested by National Grid.
A final verdict from the New York Public Service Commission regarding the proposal is anticipated in the coming months. It is understood that the proposed outcome aligns with NG’s five-year framework, making it a minor positive development for the company.
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