Mehr: Re: ‘NSTAR responds to rate complaints’
Nov. 18, 2014
NStar's Mr. Durand [Nov. 15 MWDN, A9] fails to mention that Massachusetts' 41 municipal electric utilities (munis) will not increase their rates this winter as investor-owned utilities (IOUs) NStar, National Grid, WMECO and Unitil will do.
IOUs have much to learn from our 41 munis — who use the very same pipelines for natural gas as IOUs. Since 2003, munis consistently charge less than IOUs for the same electricity (http://massmunichoice.org). Unlike NStar’s and National Grid’s upcoming 29 percent and 37 percent rate increases, munis will not charge more because of high natural gas prices.
State law requires IOUs to purchase their electricity supply for up to six months, supposedly to ensure that IOUs purchase as cheaply as possible since they pass those costs on to their customers. But there is a better way to protect IOU customers from high electric rates.
Our new governor should get legislation passed to:
- let IOUs buy their bulk electricity long-term to avoid spikes in fuel prices - as munis, large businesses and municipalities already do;
- allow the creation of new munis, creating competition for IOUs to force them to better control all their costs, including their electricity supply;
- make the Department of Public Utilities (DPU) check retrospectively that IOUs implemented all the improvements promised when rate increases were approved (for example, modernizing their network infrastructure to increase reliability), something DPU doesn’t do today.
Durand: NSTAR responds to rate complaints
Nov. 14, 2014
Having read the Nov. 13 letter to the editor titled, “The full story on NSTAR increases," we feel it’s important to address the concerns raised for the benefit of all of our customers.
In the months following last winter’s extreme cold, it became increasingly clear that generating companies from whom we buy electricity would significantly increase their prices this winter due to capacity constraints on existing natural gas pipelines. Anticipating these increases, NSTAR began proactively working with stakeholders including the media to get the word out to our customers.
The price increase we’re proposing, which would take effect on Jan. 1, would be to the electricity supply portion of customers’ bills. Delivery companies such as NSTAR make no profit on the electricity supply, by law charging our customers the exact price we pay for it. The difference between delivery and supply charges on electric bills can be viewed in much the same way as a shipping charge being different from the price of an item purchased online.
We agree that Friday may not be an ideal time to announce a price increase. However as a regulated company we adjust our supply rates on a set schedule, with a tight turnaround time between receiving prices from suppliers and filing them with our regulators. Shortly after we filed our current proposal with the Massachusetts Department of Public Utilities, we widely distributed a press release.
Regarding the price and availability of natural gas for our customers, because of the way we purchase gas and the contracts we secure, the supply is assured and prices are less affected by swings in the wholesale market. Though the price of natural gas has increased somewhat this winter when compared with last, our total price remains low – equivalent to just over $1.80 per gallon of oil.
The regional natural gas pipeline capacity issues leading to the current spike in electricity prices are real and are the primary reason electricity prices are going up. To help remedy the problem, Northeast Utilities and Spectra Energy have proposed the Access Northeast pipeline expansion project. The completion of this project would increase the availability of natural gas to electricity generating companies as well as to the increasing number of residents and businesses who want it for heating and cooking.
We’re always mindful of the effect price increases have on our customers, particularly those who are facing difficult financial circumstances. This is why we continue to urge all customers to take advantage of our efficiency programs to help reduce their usage, tighten-up their homes and keep energy bills down this winter.
Media Relations Manager, NSTAR