A state-ordered audit of National Grid’s New York electric and gas operations found the utility has made progress in some areas but still needs stronger oversight of billing, cost allocation, customer protections, procurement and long-term infrastructure planning.
The more than 300-page audit, conducted by NorthStar Consulting Group for the New York Public Service Commission, produced 72 recommendations for National Grid’s New York utilities, including Niagara Mohawk Power Corp., which serves electric and gas customers across Upstate New York.
Audit reviewed New York operations
The audit examined National Grid’s management and operations from 2020 through mid-2025, reviewing governance, electric operations, gas operations, project management, customer service, cybersecurity, information systems and procurement.
National Grid’s New York utilities include Niagara Mohawk, Brooklyn Union Gas and KeySpan Gas East. Niagara Mohawk provides electric service across eastern, central, northern and western New York and natural gas service in parts of central, northern and eastern New York.
Auditors said National Grid has gone through repeated changes in its organizational structure and operating model over nearly two decades, often in response to prior audit findings and regulatory concerns. But the report said recurring issues involving governance, accountability and authority have not been fully resolved.
Customer billing concerns among major findings
One of the most direct findings for customers involved long-term estimated bills.
Auditors said National Grid could not demonstrate adequate controls over bills based on estimates instead of actual meter readings. The report found that failures involving meter-reading equipment and backlogs contributed to customers going multiple months without actual reads.
The audit said those problems created prolonged financial exposure and customer impacts, particularly where equipment failures were not addressed quickly enough.
Auditors recommended National Grid develop a stronger action plan to reduce long-term estimated bills, address equipment failures and improve oversight of actual meter readings.
Customer complaint system criticized
The audit also found gaps in how National Grid tracks and resolves customer complaints.
Auditors said the company recently replaced an older complaint tracking system, but the new system was not fully aligned with state service standards. The report found that key functions, including automatic alerts and response-time monitoring, were not implemented.
Urgent complaints still depend heavily on manual action by employees, according to the audit.
The report also found complaint workloads were uneven across National Grid’s New York utilities, with Niagara Mohawk handling a much higher number of complaints per representative than other parts of the company.
Cost allocation issues raise ratepayer concerns
Auditors found that service company charges to National Grid’s New York utilities have increased over the past five years.
The report said National Grid did not always follow its own Cost Allocation Manual, and auditors identified instances where customers paid for services that did not benefit them.
NorthStar recommended a new service company cost allocation study under Department of Public Service oversight. The audit also recommended reinstating service-level agreements between National Grid’s New York utilities and other affiliates to better define costs, service quality and responsibilities.
Those findings matter because affiliate and service company charges can ultimately affect what ratepayers are asked to cover.
Reliability investment not clearly improving system
The audit found National Grid has invested heavily in electric asset management but has not clearly shown that those investments are producing measurable systemwide improvements.
According to the report, Niagara Mohawk has invested about $900 million in asset management programs since 2010, yet system reliability has remained essentially flat. Auditors said the company has described that outcome as “sustained reliability” rather than continuous improvement.
The audit also found that some asset strategies lacked complete analysis, detailed schedules and clear work plans.
Auditors said National Grid needs better performance indicators, clearer long-term asset management direction and stronger data collection to show whether infrastructure spending is actually improving the electric system.
Planning and climate goals questioned
The audit found National Grid’s strategic planning and capital investment practices do not always show a clear connection to New York’s energy policy goals.
Auditors said the company has repeatedly selected planning scenarios that are not aligned with state climate goals. The report also found that disadvantaged community objectives are not consistently built into strategic planning or capital investment decisions.
The audit recommended National Grid develop a clearer approach to planning and investment tied to the state’s Climate Leadership and Community Protection Act and disadvantaged community benefit requirements.
Forecasting improved, but gaps remain
The report credited National Grid with improving electric and gas forecasting.
Auditors said Niagara Mohawk has strengthened its electric load forecasting platform and added better governance and review processes. Gas forecasting has also improved, with stronger quality control and more structured planning assumptions.
However, the audit found gaps remain, especially in forecasting distributed energy resources such as solar, electric vehicles, heat pumps and storage. Auditors also said Niagara Mohawk does not validate feeder-level forecast accuracy, which can weaken local planning decisions.
New billing system carries risk
The audit raised concerns about National Grid’s planned replacement of its legacy customer information and billing system.
Auditors said the new customer information system program carries significant delivery risk because of the vendor’s limited experience with large U.S. utility implementations and the lack of detailed New York-specific technical and business requirements.
The report also raised concerns about protecting customer information, particularly as artificial intelligence-enabled technologies become part of utility systems.
Auditors recommended additional review and stronger documentation before the new system is implemented.
Procurement and documentation problems identified
The audit found weaknesses in National Grid’s procurement reporting and controls.
Auditors said the company reported that more than 90% of procurement spending was competitive, but NorthStar found the underlying classifications and documentation did not support that claim in all cases.
The report said some contract extensions were labeled as competitive even though National Grid states extensions are not part of the competitive procurement process.
Auditors also found the company could not consistently provide documentation supporting single-source or sole-source procurement decisions, even for purchases made during the audit period.
More broadly, the audit said National Grid lacked documentation across several areas, including IT projects, capital project governance, customer programs and procurement. Auditors said that limited transparency and made it harder to independently verify decisions, costs and performance.
National Grid says audit is fair overall
National Grid said in a statement that it believes the audit presents a fair assessment of its New York business.
The company said it was pleased the report recognized strong performance in electric and gas operations, capital planning, customer service, project management and load forecasting. National Grid said it does not agree with every finding but generally accepts the recommendations as constructive.
The company said it will file implementation plans with the Public Service Commission by July 13. Those plans will outline how National Grid intends to address each recommendation and will be subject to regulatory approval.
PSC will review next steps
Under state law, major utilities are required to undergo management and operations audits every five years.
The Public Service Commission will review National Grid’s implementation plan and determine whether changes are needed before the company moves forward.
For customers, the most important questions are whether the process leads to fewer estimated bills, better complaint handling, stronger cost controls and more transparent infrastructure planning.
The audit makes clear that National Grid is not starting from zero. But it also shows that regulators and ratepayers still have significant reason to scrutinize how the utility manages money, systems and service across New York.
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