Even with cut, Unitil users still paying more
By Michael Hartwell, mhartwell@sentinelandenterprise.com
Posted: 10/14/2013
FITCHBURG -- Electric utility rates across the state are higher than they were a year ago, including those of Unitil, which recently saw a reduction in its transition rate, but a Unitil spokesman said that cost was more than offset by an increase in the cost of electricity itself.
On Sept. 1, Unitil customers saw a drop of 0.4 cents per kilowatt hour. Unitil spokesman Alec O'Meara said this comes from a planned reduction in the transition rate related to the sale of the Pinetree woodburning power plant at the Fitchburg-Westminster line in the late 1990s.
Unitil customers had to pay an extra fee -- a transition fee -- that stemmed from the power plant. That fee is being retired in three chunks, according to O'Meara. In the past, Unitil has said the transition rate would be phased out some time in 2014, but no specific dates were known.
O'Meara said the dates are now official. A second fee reduction of another 0.4 cents per kilowatt hour will roll out Jan. 1. He said the majority of the cost -- 2 cents per kilowatt hour -- will retire Jan. 1, 2015, bringing the total reduction to 2.8 cents per kilowatt hour.
However, Patrick Mehr of the Massachusetts Alliance for Municipal Electric Choice said even with phase one of that reduction, Unitil customers are now paying more than they were a year ago because the Department of Public Utilities recently gave the green light to Unitil for a small rate increase.
Using a sample bill of 500 kilowatt hours a month, Mehr said a Unitil customer in Massachusetts paid an average of about $100 monthly between January and September 2013. That's a 3.6 percent increase over the same period in 2012, when the same bill was around $96.
"It's not the trend poor people in Fitchburg would like to see," said Mehr. Electricity rates had been on a downward slope each year from 2008 and 2009 in all of Massachusetts, including Unitil, National Grid and towns with municipal-owned utility companies. In all cases the average bill hit a low point in 2012 and rose in 2013. National Grid customers are seeing a 4.9 percent increase, and customers of municipally owned utility companies saw a 0.9 percent increase.
Using the same sample 500 kilowatt hours a month, National Grid customers paid an average of $73 monthly between January and September and municipally owned utility company customers paid $69.
O'Meara said that cost increase comes directly from cost increases in the supply of electricity, which was greater than the reduction Unitil customers experienced from the first phase of the transition--rate decrease.
He said at this time last year, customers were paying 6.23 cents per kilowatt hour for the electricity itself. Now they are paying 7.85 cents per kilowatt hour.
Every six months, Unitil finds the market rate for electricity and presents that price to the Department of Public Utilities to set the rate customers pay. That 1.62 cent increase dwarfed the 0.4 cent decrease in kilowatt-hour rates.
O'Meara said the increase in electricity rates stem from increases in natural-gas prices; natural gas is burned to produce power.
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