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Electric rates on the rise
By Brian Falla/ Daily News Staff Wednesday, June 14, 2006

NORWOOD -- Electric Light commissioners last night voted to increase electric rates to avoid giving ratepayers a huge shock in the future.

The increase of 1 cent per kilowatt hour, which will raise the average ratepayer’s bill by $5 a month, will go into a stabilization account aimed at cushioning what could be a 60 percent increase when the town has to get a new electric power contract in 2009.

The 1-cent-per-kilowatt-hour increase will mean a residential bill for 500 kilowatt hours will jump from $40.81 to $45.81 per month, but that is still well below what ratepayers in surrounding towns pay.

According to the Light Department, even after the 1 cent increase, local ratepayers will pay between 51 percent and 59 percent less than NStar customers, depending on usage.

Light Department Superintendent Malcolm McDonald told commissioners last night that the best estimates indicate that without rate increases the town will be $22 million short when it has to purchase electricity in 2009.

Although the town distributes electricity through its own Light Department, it still has to buy electricity from wholesale providers. Rather than hit customers with what would be a 60 percent increase in rates, McDonald said the town’s Future Electrical Power Supply Needs Committee recommended a 1 cent increase this year with the idea of potentially raising it again in the coming two years to build up a stabilization fund.

"It does not seem wise or prudent to burden ratepayers with the entire increase at once," said Commissioner Bill Plasko, who also sits on the committee.

But the vote was not unanimous. Selectmen Tom McQuaid and Jerry Kelleher pushed for a 2-cent per kilowatt hour increase.

"It seems to me 1 cent will not be enough," McQuaid said.

McDonald said the 1 cent increase would put roughly $3.6 million into the stabilization fund in one year. "We can always revisit this next year," McDonald said.

General Manager John Carroll stressed the increase has nothing to do with an ongoing lawsuit with New England Power that could cost the town more than $80 million.

Brian Falla can be reached at 781-433-8339 or at bfalla@cnc.com.