Electricity prices to soar

National Grid says its six-month winter rates will be highest ever

An update has been added to this story

National Grid says it expects its six-month electricity rate for this winter to rise to its highest level ever, an increase caused by the region’s heavy reliance on natural gas and the inadequate capacity of gas pipelines coming into the area.

In filings with the Department of Public Utilities, the state’s largest utility said its bid process for power for this winter yielded a six-month average residential rate of 16.18 cents per kilowatt hour. The company’s website lists so-called basic service rates going back a decade, and none of them come close to the projection for this coming winter. The closest was 12.66 cents in the winter of 2009. A company spokesman later said the six-month fixed price for electricity this winter will be the highest ever.

This winter’s price, once approved by regulators, would be almost double the current 8.3-cent a kilowatt hour price and well above the 10.02-cent price of last winter. The utility said power prices should top 21 cents a kilowatt hour during the individual months of January and February.

National Grid purchases electricity on behalf of most of its customers. The power cost is a component of a customer’s overall bill, which also includes charges for transmission and delivery. Last winter, the total rate customers paid was 17.65 cents a kilowatt hour; this winter the cost is expected to be 24.24 cents per kilowatt hour. For the typical customer using 500 kilowatt hours of electricity a month, their bill will go from $88.25 a month last winter to $121.20 this winter, a gain of $33, or 37 percent, compared to last winter, National Grid said.

The sharply higher rates are coming at a time when several of the region’s coal power plants are shutting down and the New England governors are debating where replacement electricity will come from. There seemed to be a consensus among the governors earlier this year to expand the capacity of gas pipelines coming into the region and to import large amounts of hydroelectricity from Canada. But that consensus has fizzled lately amid rising environmental concerns about expanding gas pipelines coming into the region and the failure of the Massachusetts Legislature to pass legislation that would pave the way for imports of Canadian hydroelectricity.

Maeve Vallely Bartlett, the Massachusetts secretary of energy and environmental affairs, predicted in August that electricity prices would rise sharply this winter due to “our constrained natural gas supply.” But earlier this month she sent a letter to the Federal Energy Regulatory Commission raising questions about the proposal of Kinder Morgan to build a gas pipeline extension from the New York border to Dracut.

“It is unclear whether Massachusetts needs additional infrastructure to meet demand, and if so, how much,” Bartlett wrote in her letter to FERC. She added: “Given the Commonwealth’s climate goals, it is critical that any efforts to build additional natural gas infrastructure are limited to only what is determined to be necessary.”

Last winter, when low temperatures and natural gas shortages plagued the region, officials trying to build Cape Wind said the long-delayed wind farm would have significantly reduced stress on New England’s power grid. Both National Grid and NStar, the other major electric utility in Massachusetts, have contracts to purchase Cape Wind power if the offshore wind farm ever gets built.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

NStar, a division of Northeast Utilities, has not yet filed its proposed rates for this winter with the Department of Public Utilities, but they are expected to track those of National Grid. NStar’s service territory is eastern Massachusetts.

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