Massachusetts Electric Consumers Keep taking it on the Chin.

More increases in delivery charges

Eversource announced its plans to once again raise electricity rates for its customers next year.  Monday, Eversource requested the Department of Public Utilities[DPU] for an increase in consumer’s delivery rates by $96 million. This increase would represent an intended profit of 10 1/2% that Eversource would like to return to its shareholders. Eversource’s request comes on the heels of last year’s almost 10% shareholder profits margin from National Grid, which is the other major electric utility in Mass.

Massachusetts Attorney General Maura Healey is contesting the requested rate hike. “As a regulated public utility, Eversource is required to justify why the state should permit it to raise electric rates on residents and business customers,” Healey said. “Our initial evaluation shows that Eversource should be returning profits to customers as savings, not raising rates. We urge the DPU to reject Eversource’s request for a rate hike.” Healey’s rebuke of Eversource will most likely have little to no impact as she took the same position against National Grid regarding their pending rate hike last year, to no avail.

Eversource claims that the increase is needed to “alleviate revenue deficiencies” in Western Massachusetts. This was previously serviced by former utility companies that have since merged with the utility giant. Eversource further sites the increase as “necessary to make improvements to infrastructure which would increase reliability.”  Eversource spokeswoman Caroline Pretyman stated that “our investment in a modernized electric grid will mean an increasingly smarter, more technologically advanced system for customers, allowing the company to expand its commitment to reliability and clean energy.”

Supply Prices Up Again

These increase on the delivery side of consumer utility bills are the latest blow in what has become an annual event within the State. National Grid recently enacted a steep price increase on their basic service supply rates, taking effect last November, which represented a 21% increase in the supply price. Sadly, this has become commonplace for consumers in Mass, who have become accustomed to large spikes in cost every winter. In 2014 National Grid customers felt an increase of almost 100% on their electricity supply from $0.08277 per KWh on October of 2014 to $0.16273 per KWh in November of that year. Similar increases happen to Eversource customers supply prices each winter.

This is due to the reoccurring “Winter Reliability” issue that has plagued the region the past few years. Winter Reliability is a tariff revision proposed by the New England grid operator (ISO-NE), and approved by FERC, (Federal Energy Regulatory Commission) that incentivizes electricity generators to secure fuel prior to winter, and then compensates them for any of the unused fuel. That compensation is directly reflected in the costs that are handed down to consumers as electric supply prices.

This annual punch to the gut has become necessary in Massachusetts due to the fact that more than 45% of the total generating capacity in New England uses natural gas as its primary fuel. The majority of natural gas pipeline capacity is committed for commercial and residential heating use in the winter. This has caused a major “capacity” issue in the region due to natural gas pipelines operating at or near full capacity to serve heating demand during most of the winter. There’s just not enough natural gas in the region to power electric plants if much of that gas is also heating homes and businesses on cold days.

What Can Consumers Do?

Fortunately, the people of Massachusetts do have a way to directly affect their supply cost.

Energy choice allows for direct competition for the electric supply costs that customers pay. By choosing an authorized retail energy provider, customers can control, and often reduce the total cost they pay for the energy they use.

Normally, there is nothing that consumers can do about the increases on the delivery side of their energy bills. Those decisions and implementations are on the side of service that they have no control over.  However, we can provide demand-side solutions to reduce your usage and thus lower your yearly spend.

To find out more information on how to find an energy solution that is the right fit for you, click here to contact one of our senior energy advisors .  or visit www.naea.wpengine.com.

References www.bostonglobe.com, www.electricitywatch.org, www.iso-ne.com