Western Massachusetts Electric Co. rates expected to rise $5 per month for average customer
Published: Wednesday, November 30, 2011
By Jim Kinney, The Republican
SPRINGFIELD – Western Massachusetts Electric Co. electricity bills could go up about $5 a month for an average residential customers assuming a pair of rate adjustments go into force in early 2012.
An average residential customer, defined as using 700 kilowatt-hours of power a month, pays $109 a month now, spokeswoman Sandra Ahearn said Wednesday. Under the new rate structure, that will increase to about $114 a month.
The rate changes are still under review by the state Department of Public Utilities, said Catherine Williams, a spokeswoman for the department. Williams said she had no timeline for a decision.
Ahearn said electric delivery rates, the cost of wires and equipment that gets power to homes and businesses, will decrease Feb. 1 for all customers. But, for customers who also buy power from Western Massachusetts Electric Co., that decrease will be offset by an increase in the cost of electricity that will go into force Jan. 1, Ahearn said.
From January 1 to June 30, Western Massachusetts Electric Co. residential customers on basic service will see a supply rate of 7.741 cents per kilowatt hour, compared with 6.998 cents per kilowatt hour for the previous six-month period.
Small commercial and industrial customers will see a supply rate of 8.264 cents per kilowatt hour, compared to 7.498 cents per kilowatt hour for the previous six month period.
National Grid, the region’s other large investor-owned power utility, said its rates have already gone up. Effective Nov. 1, National Grid’s new rate is 8.2 cents a kilowatt hour, up from 7.3 cents a kilowatt hour in the previous six months.
Investor-owned utilities in Massachusetts are required to go to the electricity market and bid for power twice a year, according to both companies. Deregulation of electricity utilities meant that the investor-owned utilities cannot own generating capacity except for a limited amount of renewable generating capacity, such as solar panels.
“This rate change is driven primarily by the supply rates that we don’t have any control over,” Ahearn said. “A lot of this is seasonal changes. As the price of natural gas changes, so does the cost of power.”
Natural gas prices drive electricity costs because about half the region’s power is generated by burning natural gas.
Municipal utilities can avoid those seasonal changes by buying power on longer contracts and maintain ownership stakes in power-generating plants, said Sean P. Fitzgerald, energy specialist and customer liaison for Westfield Gas & Electric.
“That’s the problem with investor owned utilities. They have to buy twice a year in big chunks,” he said.
Electricity rates in Westfield won’t change next year, he said.
David F. Tuohey, director of communications for the Ludlow-based Massachusetts Municipal Wholesale Electric Co., said the cooperative has been getting good deals for its member municipal utilities for power in 2012, 12013 and 2014.
“Now we are working to fill in the gaps for 2015,” he said.