Decision Resolves Concerns Against National Grid Related to Federal Criminal Case

Settlement Money Will be Used to Offset Future Ratepayer Costs

ALBANY — The New York State Public Service Commission (Commission) today adopted a settlement valued at $42 million with National Grid and its downstate subsidiaries resolving issues related to National Grid's downstate gas business after several former National Grid employees were charged and convicted in a bribery and kickback scheme involving contracts worth tens of millions of dollars.

“Today’s decision finalizes our investigation into the actions of now former employees of National Grid who were charged and convicted of soliciting and accepting improper payments from a contractor in connection with facilities’ department contracts in Long Island and New York City,” said Commission Chair Rory M. Christian. “In this proceeding, we examined potential imprudence, the adequacy of National Grid’s internal controls, and National Grid’s compliance with its own internal procedures as well as provisions of the Public Service Law, the Commission’s regulations, and Commission orders.”

On June 17, 2021, the United States Attorney for the Eastern District of New York announced that five managers of a New York utility company had been charged with conspiring to violate the federal law by accepting hundreds of thousands of dollars in bribes and kickbacks in exchange for steering contracts to certain Long Island-based contractors with whom the company did business.

The federal criminal complaint raised significant concerns related to the internal controls established and implemented by the companies. To ensure the integrity of the companies' contracting process, the Commission's June 23, 2021 order directed the companies to file an initial investigation report detailing various aspects of the companies' operations including but not limited to the companies' internal controls, procurement, invoicing, ethics, and investigation practices.

Additionally, the Commission’s 2021 rate case order required the companies to each collect $2.5 million of National Grid’s downstate subsidiaries, Brooklyn Union Gas Company’s and KeySpan Gas East Corporation’s, revenue requirement through a rate adjustment clause to be disposed of by the Commission in this proceeding.

Since 2021, the Department and the companies pursued a robust investigation including conducting interviews with the criminal defendants and National Grid personnel and using customized data analytics to evaluate the efficacy of invoices and transactions made since 2013, the totality of which is detailed in the companies' supplemental report. The settlement provides a substantial financial benefit to customers as the Companies’ shareholders will be responsible for $42 million associated with the case. Per the terms of the settlement, the companies agreed to return to customers the full $20 million recovered over the term of the last rate plan through the rate adjustment clause, and not to seek recovery from customers of the more than $22 million incurred in connection with the companies' own investigation and controls enhancement activities. The Commission’s decision today resolves concerns against the companies related to the federal criminal case. The $20 million component of the settlement money will offset ratepayer costs.

Today’s decision may be obtained by going to the Commission Documents section of the Commission’s Web site at www.dps.ny.gov and entering Case Number 21-M-0351 in the input box labeled "Search for Case/Matter Number". Many libraries offer free Internet access. Commission documents may also be obtained from the Commission’s Files Office, 14th floor, Three Empire State Plaza, Albany, NY 12223 (518-474-2500). If you have difficulty understanding English, please call us at 1-800-342-3377 for free language assistance services regarding this press release.