Higher Electric Utility Rates Stretching Consumer’s Budgets

As the holidays approach, higher electric utility rates are taking a toll on consumers.   The solution?   Shop the market, review all the options. 

In Massachusetts, National Grid’s rates are 37% higher than last winter. NSTAR’s rates have increased 29%

On December 8th WGBH News covered the recent changes in electricity rates.

The reason given for these increases — the high cost of natural gas delivered to New England during the winter months.

The rise in natural gas dependency has been dramatic in the region. ISO New England, the manager of the regional electricity grid, indicated that nearly 15 years ago, natural gas represented only 15% of the total mix of fuels.  In 2014, natural gas is now the leading source of electricity in the region, accounting for 55% of production — that’s an increase of 266%! Currently, the second leading source of electricity is now nuclear, with coal representing 1% and oil even less than that, a dramatic restructuring of the region’s traditional fossil fuel mix used to generate electricity.

Regional Concern:

In New Hampshire, customers of two utilities – Liberty and Unitil – will see an increase in their electricity supply rates greater than 40%. As of December 1st, 2014-PSNH, the state’s largest utility, has not announced their new rate.

State energy officials are going to unprecedented lengths to put information into the hands of consumers.  The New Hampshire Office of Public Advocateput out a news release offering advice to consumers on how to manage their utility bills this winter.

Maine households on the standard offer have been protected from price swings because the PUC (not the utilities as many believe) has been bidding only one-third of the total standard-offer price each year.  The PUC bidding process will change this year, with standard-offer bids reflecting more-immediate, real-time prices. That process will begin later this fall and rates will change on March 1, 2015.

How much will Maine residential consumer pay for power?  Maine’s Public Advocate, Tim Schneider, is quoted in a recent news story as saying consumers should pay attention to the rates offered by competitive electricity supply companies such as Electricity Maine. “I think they are indicative of what the next annual solicitation will be for the standard offer,” he said.

Are there any short-term solutions for customers—both residential and business owners?

Emile Clavet, co-owner of Provider Power (the parent company of Provider Power Mass, Electricity Maine, and ENH Power, one of region’s largest competitive electricity suppliers, suggests consumers “lock in” a longer term contract for electricity.

“It all depends on personal risk,” said Clavet. “In this environment, with so much fluctuation in the cost of power, it is our belief that the best option for consumers is to lock-in a longer term contract—especially one that covers as many ‘peak seasons’ as possible. Fixed, longer term contracts protect consumers,” he said.

Similar to oil-price contracts that allow customers to pay a set price for each gallon purchased during the heating season, even if the price of heating oil spikes, competitive electricity providers also offer similar type contracts for the power they provide.

“There isn’t a model that suggests rates will go down any time soon,” added Clavet.

To read more about what is driving the cost of electricity and the impact on residential and business consumers visit:

Boston Globe

Cape Cod Today

 

NSTAR Electricity Rates Set to go up for Massachusetts Customers

Energy Choice Matters, a highly respected website committed to providing timely and in-depth coverage of the competitive retail electric (and natural gas) markets, and the Boston Globe are reporting NSTAR customers can expect electricity supply costs to go up by 29%.  If approved by regulators, the new residential default service rate will increase to 14.972 cents per kilowatt-hour beginning January 1, 2015.

 

This rate announcement is of little surprise, as comes on the heels of  National Grid’s November 1st rate increase of 37% (compared to last winter), but will still be a shock to the wallets of NStar customers.

Do consumers have options?  Yes!

Prior to 1997, electric utilities owned both the distribution function – the poles and wires – and the supply function – electricity generation.  This means that National Grid and NSTAR are only responsible for delivering the power to their customers, but not generating it. As a result, customers are free to choose from Competitive Electricity Suppliers such as Provider Power Mass.  (Along with ENH Power and Electricity Maine, Provider Power Mass is part of the Provider Power family of companies and was recently recognized by Inc. magazine as one of the nations fastest growing companies).

Energy experts and advocates across New England are raising awareness of these rising electricity supply rates and the opportunities to shop around with competitive suppliers like Provider Power. Ann Berwick, Director of the State Department of Public Utilities in Massachusetts, was recently quoted in the Barnstable Patriot  suggesting this is the time for consumers to consider electricity supply companies.

Maine’s Public Advocate, Tim Schneider, is quoted in a recent news story as saying consumers should pay attention to the rates offered by competitive electricity supply companies such as Provider Power (Electricity Maine). “I think they are indicative of what the next annual solicitation will be for the standard offer,” he said.

Emile Clavet, co-owner of Provider Power Mass, suggests consumers review the market and “lock in” a longer term contract for electricity.

“It all depends on personal risk,” said Clavet. “In this environment, with so much fluctuation in the cost of power, it is our belief that the best option for consumers is to lock-in a longer term contract—especially one that covers as many ‘peak seasons’ – winter and summer months – as possible. Fixed, longer term contracts protect consumers,” he said.

Similar to oil-price contracts that allow customers to pay a set price per gallon during the heating season even if the price of heating oil spikes, competitive electricity suppliers offer similar types contracts for your home’s electricity.

“There isn’t a model that suggests rates will go down any time soon,” added Clavet.