Behind the Headlines & Electric Utility Fees

It is always good to look beyond the headlines, they don't always tell the whole story. This Wall Street Journal story about electric utility fees is one example.

The Headlines Read:

A Wall Street Journal article from October 20, 2015 suggests that utilities are seeking to punish customers because of their efforts to conserve electricity. The article, well the research used to justify the article, is based mostly on a report published by the Environmental Law & Policy Center (in Chicago).

The Research Says:

The headline and report from the Chicago group are very misleading. Yes, 22 utilities have asked for higher fees. Yes, other utilities have suggested they may ask for increases. These fees though are not a result of consumers’ conservation efforts-they are fees associated with developing a smarter grid, infrastructure upkeep and associated costs.

From WSJ.com

What the article does point out and should be of concern, flat rate ‘fees’ that every consumer pays the same amount for disproportionately impact those who use less power. While most of our electric bill can be attributed to the amount of power we use (we pay a rate per kilowatt for supply and a separate rate per kilowatt for delivery), fees are fixed and not tied to usage

Bradley Klein, a lawyer for the Environmental Law & Policy Center, is quoted this way,

The result {of higher fixed fees} is that low-use customers pay more than in the past, and high-use customers pay less.

William Dornbos from the Maine-based Acadia Center (they promote clean energy) says high monthly fees reduce the portion of the bill that a customer has the ability to lower.

Fixed fees are unpopular because they disempower the customers and discourage investments in rooftop solar and energy efficiency.

To bring this full circle, the reality is:

• In both regulated and de-regulated states, utilities have fixed rate fees. Fess are usually related to costs associated with infrastructure and technology updates.
• Utility fees are the one part of your electric bill not tied to kilowatt usage.
• Fees are approved by regulators, consumers do have an opportunity to speak up and oppose (or support them) before enacted.
• Deregulated states, where consumers select their supply company, are not immune to these utility fees.
• Conservation efforts don’t cause these fees to increase; this is especially true in states with energy choice

A copy of the author's Central Maine Power bill showing "Fixed Delivery Fee"
A copy of the author’s Central Maine Power bill showing “Fixed Delivery Fee”

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National Grid Winter Rates Increase (again)

National Grid Massachusetts has announced their winter rate increase. Consumers across Massachusetts, tired of rates shifts, look to longer term fixed rates from supply companies like Provider Power Mass.

As if pro-forma for Massachusetts electric utilities, National Grid has asked for their winter rate increase.  Last year it was a 37% hike and this year their request to the Mass DPU is a 21% increase (compared to their spring/summer rates).  If approved, the new rate of 13.1 cents/per kWh will begin on 11/1/2015 for 6 months.  This yearly rate increase comes along as consumers are already preparing for added costs associated with colder winter months and increased electricity usage.

The rate request is being reported across several media outlets in the region:  Boston Globe, Fox Boston, Boston Herald.

Not including the new yet to be approved rate, here is a glimpse of National Grid’s seasonal rate swings since November of 2013.

Information from: www.nationalgridus.com/masselectric/non_html/MA_Residential_Table.pdf
Information from: www.nationalgridus.com/mass

 

Massachusetts consumers continue to seek alternatives for their electricity supply needs.  Thanks to electricity deregulation most electric utility customers may select a supply company other than their utility.  Customers stay with their utility, continue to only get one bill from that utility (the supply portion is billed through the utility), but the actual power (the supply) comes from a different company.

For National Grid and Eversource (formerly NSTAR) Massachusetts customers, longer term fixed rates from supply companies such as Provider Power Mass continue to pay dividends.  While the utilities take customers on a rate roller coaster ride, fixed longer term rates provide stability and predictability for homeowners, renters and small businesses across the Bay State.

Provider Power Mass, along with ENH Power and Electricity Maine, is part of the Provider Power family of companies.  New England owned, doing business locally and purchasing power through the New England Power Pool,  Provider Power brings competitive, fixed long-term electricity rates to residential and small businesses across Massachusetts, New Hampshire and Maine.

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Simple Tips to Save Money & Energy Around the House

No more thinking or guesswork - Here are some simple ways you can cut back on energy consumption for each room in your home - and save money while doing so!

Have you ever wondered how you can cut energy costs depending on the room you’re in? Now, we take the thinking and guessing out of it. Here are some simple ways you can cut back on energy consumption for each major room in your home.

Save Money and; Energy Around the House

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More Nat Gas Pipelines May Not Be The Answer

Calls for more studies of natural gas capacity and more pipelines may not be answer to the rollercoaster rate ride offered by the utilities.

In general, the two main drivers of wholesale electricity prices in New England are the cost of fuel used to produce electricity and consumer demand.

The closure of nuclear power plants, the costs of operating coal fired plants in New England, and the region’s dependence on natural gas has contributed to price volatility.

Instead of going with fixed, longer term rates many residential and small business consumers continue to use their utility as their supply company. In Massachusetts consumers who have not yet selected an electricity supply company (like Provider Power Mass) and instead continue to get their supply from their utility, are subjected to wicked rate swings.   .

On the political front many have sought answers, stepping up on behalf of constituents, recommending the situation be studied…and studied…and studied.  Since electricity prices are (as previously stated) a product of supply versus demand, conventional wisdom is that if you increase supply-then prices should stabilize.  As a result of these studies and the opinions of experts, underway are several initiatives to increase the flow of natural gas into Massachusetts (as well as Maine, New Hampshire, Connecticut and Rhode Island).

There is of course a wrinkle.

As pointed out in a recent Boston Glob piece, Ann Berwick a former Massachusetts’ undersecretary for energy and later head of the Mass. Department of Public Utilities, more product doesn’t necessarily mean lower prices. She suggests we look at electricity costs in Pennsylvania.

Boston Globe.  8/17/15
Boston Globe. 8/17/15

Berwick says consumers need to have a thorough understanding of all the players and their roles in this debate, as well as some realities that don’t always make headlines.

  • Many proponents of added capacity are energy companies.  Under current regulations, utilities make more money by building infrastructure than by encouraging conservation and energy efficiency. So, of course, they argue for infrastructure.
  • Black & Veatch study — done under the auspices of the New England States Committee on Electricity — favored more natural gas, but also concluded that if increased energy efficiency limits growth in the demand, no additional gas will be needed.
  • New natural gas pipeline capacity won’t be a benign solution to our electricity or energy challenges. It would exacerbate our dependence on a single fuel with a history of price volatility.   This dependence could impact future policy towards a fossil fuel that is far from clean, and increase our reliance on a fuel that depends on fracking.

At Provider Power we believe an independent, thorough analysis of the energy/electricity landscape in New England is needed.  Consumer understanding and education should continue to be a priority.  At Provider Power Mass, regardless of the energy landscape, we will continue to offer competitive, long term fixed rates and information to help Massachusetts consumers mitigate the rate roller-coaster rate ride.  To learn more about Provider Power Mass, please visit us at www.providerpowermass.com.

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Energy In the News: July Recap

Obama, Kennedy and Baker talk energy. Natural Gas and Nuclear make headlines. Here is a recap of energy stories as covered by media outlets across Massachusetts and the nation.

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Is Nuclear the Answer to New England’s Electricity Price Volatility?

Nuclear Matters campaign Co-Chair Sen. Judd Gregg says early closure of nuclear power plants are causing electricity prices to go up. The argument is that nuclear is of better value than other options and a cleaner option than coal.

In a recent the Cape Cod Times piece (which was really a press statement from a New York City PR agency) Nuclear Matters campaign Co-Chair Sen. Judd Gregg talks about the benefits of Nuclear Power.

According to their website the mission of Nuclear Matters is to inform the public about the clear benefits that nuclear energy provides to our nation, raise awareness of the economic challenges to nuclear energy that threaten those benefits, and to work with stakeholders to explore possible policy solutions that properly value nuclear energy as a reliable, affordable and carbon-free electricity resource that is essential to America’s energy future.

One argument outlined by Sen. Gregg is that the premature closure of Vermont Yankee nuclear power plant and possible closure of other plants in the region are having an adverse impact on the cost of electricity.  His contention is that the early closure of nuclear power plans and our over reliance on natural gas is making electricity too expensive for electricity customers in Maine, New Hampshire and Massachusetts.

Gregg also says nuclear power plants produce electricity at a good value without emitting any carbon dioxide.  Cleaner for the environment he says than other options like coal burning plants.

ISO-New England operates the region’s power grid.  At any time any of us can see what the current power mix is for the region. If you like this type of stuff, I urge you to check out their website.  This is what it looked like at 11:31 AM on July 28.  While this number fluctuates based on demand, nuclear made up about 22% of the fuel mix.

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Is there room and opportunity within our current energy mix to use more nuclear? Yes. In fact, nuclear used to play a much greater role in generating electricity for the region.   While nuclear could have a positive impact on the per kilowatt price of electricity, like all means of generation, costs associated with the plant and upkeep will show up on other parts of our electricity bill.

As a former United States Senator and Governor from New Hampshire, Mr. Gregg is certainly qualified to and familiar with the state of energy affairs in New England.   It is of course important to consider his role and the role of this organization, to advocate on behalf of the nuclear energy sector.

 

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Are Automatic Bill Payments Driving Up Energy Use?

A recent study suggests those who use auto bill pay programs tend to not pay attention to how much power they use. The result, higher consumption and higher energy bills.

Across the Provider Power family of companies (Electricity Maine, ENH Power, Provider Power Mass) we take great pride in sharing ideas, tips and techniques to help you reduce energy consumption around your home and office. Let’s face it, regardless of how much you are paying per kilowatt for electricity, using less power is the best way to save on your power bill.

When was the last time you looked at your electric bill, do you know how how much power you are use every month? If you don’t know or haven’t looked at your electric bill, I wonder if it is because you participate in an automatic payment program.

A new study released by The Review of Economics and Statistics suggests customers who use automatic bill payment programs use more energy, and accordingly have higher bills, than those that aren’t.

While there is convenience for both the consumer and businesses, there may be an energy downside. More than 14 million monthly bills for 684,000 accounts (both residential and business) were reviewed. Those who participated in an auto pay program experienced a 4% increase in consumption. Newer participants in auto pay programs had a 6% increase in consumption. Businesses on an auto pay program use 8.1% more power.

There are a myriad of benefits to electric utilities, supply companies (such as us) as well as consumers to continue with automatic bill payments. Should we eliminate automatic bill payments? No. Should we pay closer attention to how much power we are using? Yes.  We shouldn’t allow the benefits of auto bill payments to supersede our responsibility to pay attention to energy usage.

In the “old days” we used to open our bill from our power company, write out a check and drop it in the mail.   According to the research, the hands off approach to paying our power bills, not reviewing the details or even look at our bill, has led to an out of sight/out of mind mentality.

Most utilities, especially those with an automatic bill pay options, offer the opportunity to review your power bill on line, including day by day usage details.

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Thanks to smart meters and smart grids, some of us are able to review energy use in real time (or close to real time). Central Maine Power customers are able to take advantage of CMP’s “Energy Manager”, customers are able to monitor energy use for the previous day.

Just as it took time for consumers to embrace the idea of auto payments, we should become more comfortable with and utilize the online resources available to us to monitor and track our energy consumption.

 

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Provider Power Targets Businesses With New Website

Providerpower.com/business is designed to help businesses across Maine, New Hampshire and Massachusetts navigate the complex world of electricity choice.
Provider Power helps businesses, schools, municipalities, and organizations of all shapes and sizes by giving them competitive electricity rate plans to help them manage their bottom line.

Provider Power, the Maine based parent company of Electricity Maine, ENH Power and Provider Power Mass, is pleased to announce the launch of providerpower.com/business.

The new site is designed to help businesses across Maine, New Hampshire and Massachusetts navigate the sometimes complex world of electricity choice.

Candace Sanborn, Provider Power’s Vice President of Marketing, says it was important for Provider Power to keep in mind the unique energy needs of small to medium businesses.  “As a mid-size New England company ourselves, we have an appreciation for the challenges businesses face with higher electricity costs than other regions of the country due to our weather patterns and lack of natural gas pipeline infrastructure. We share their concerns and are doing what we can in this space to help educate businesses about energy options and resources, as well as keeping them informed about the discussions and decisions that impact our region’s energy costs.”

The new Provider Power business website is designed to make shopping for electricity easier through a short intake process. “By asking a few simple questions up front we are able to move the process along quickly” says Sanborn.  After assessing energy use, depending on utility, Provider Power typically provides a quote within 3-5 business days.

With more than 200,000 residential and business customers across the Provider Power family of companies, has the systems, technology, experience and partners to accommodate businesses of any size.

To learn more about Provider Power’s business capabilities, visit www.providerpower.com/business.

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