littleton independent
Note: bold by MAMEC

Despite rate increase, Light Department rates remain low

Thursday, November 10, 2005

     The Board of Electric Light Commissioners approved a 1.5 cent per kilowatt hour increase in its power cost adjustment charge, citing the need to cover rising power costs. Despite the action, the local utility's residential rates still remain the lowest in the region, averaging more than 30 percent less than those charged by both Mass Electric and NStar for the same usage.

     "With the costs of oil and natural gas so high, we have had to raise the PCA to recoup those extraordinary costs," explained Savas Danos, general manager of the department. "While we are continuing to do everything we can to keep rates stable, we have reached a point where we need to offset the skyrocketing market prices," he said. The cost of electricity in New England is controlled by natural gas, he added, and prices have nearly doubled in a year.

     In stark contrast to private utilities, which are poised to raise rates even higher in the first quarter of next year, LELD has consistently kept rates among the lowest in the state. The latest statistics compiled by the Massachusetts Municipal Wholesale Electric Company, which tracks the rates of both public and private utility companies, show that LELD's residential rates regularly beat the competition. For purposes of comparison,
a Littleton customer using 750 kWh per month over the last year had a monthly bill of $69.64. The same usage in Ayer, served by Mass Electric, cost $88.78; while in Acton, served by NStar, that usage cost $110.42.

     Danos explained the challenges of power purchasing in a rapidly evolving industry marked by instability and increased market manipulation. He said that although the department has entered into favorable contracts to supply longer-term, lower cost power, two of those companies have been unable to deliver - one declaring bankruptcy and the other exiting the business. Until those contracts are reassigned or replaced, he said, the department must fill the gaps by purchasing in a volatile market. "I know of no other utility, public or private, that has been able to hold the line on power costs as well as we have, Danos said.

     "We continue to aggressively pursue agreements that will help us retain our status as the region's low-cost electric utility," Danos said. "We look forward to keeping our commitment to competitive rates, outstanding reliability and superior service."