Editorial: Sharp difference emerges in utility winter rates

Last modified: Tuesday, November 03, 2015

Electricity customers in parts of Massachusetts won’t get the spot-market blues to the extent they did last winter, when costs shot up. Combined with relatively low gas and fuel oil costs, Eversource consumers, at least, are getting a break in the months ahead.

Further out, though, the question of how residents of Massachusetts obtain electricity — and at what price — remains unanswered as the state faces the continued loss of coal-fired and nuclear generation plants.

The state Department of Public Utilities is reviewing a proposal from Eversource to increase its rates by 6 percent starting Jan. 1. The price per kilowatt-hour would climb from 9.767 cents to 10.394 cents, but is 27 percent lower than last year’s winter supply charge. If the rate is approved, a typical residential customer’s monthly bill this winter will be $102 compared with $121 last year.

That’s relatively good news for customers in the cities and towns it serves.

National Grid customers?

The news isn’t nearly as good. The company filed in September for a 41-percent bump in its winter rates, from 9 to 13 cents per kilowatt-hour. A typical residential customer’s monthly bill will be $110 a month, or 21 percent more than summer rates but less than the average bill of $121 last winter.

The disparity between the increases sought by the two companies says something about what’s wrong with the electricity market in our region.

Both utilities shop for wholesale electricity and bring that power to customers’ homes and businesses. Costs go up in the winter because companies that bring gas supplies for heating to customers get priority in cold weather under long-term contracts.

Last winter, electricity suppliers like Eversource and National Grid faced high costs for natural gas because in 2013-2014, there were shortages of the fuel.

Those shortages didn’t materialize for 2014-2015, making it a spectacularly profitable year for gas supplies and a winter of discontent for everyone else — and one of true misery for those who heat with electricity.

Last winter’s sticker shock for customers of both Eversource and National Grid got many talking about how these costs can be better managed. Constituent complaints about the byzantine process of setting electricity rates got lawmakers buzzing and the Legislature succeeded in tossing out an old law that financially penalized people who exercised their right to shop for cheaper rates.

New England faces big gaps in its electricity supplies just years down the road. Getting that problem solved will consume an awful lot of plain old human energy in the next few years.

It’s unlikely the cost curve will turn anywhere but up.


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