Standard Times

Surging bills spark outrage
In '06, SouthCoast paying $20 more in monthly electric bills

By BECKY W. EVANS Standard-Times staff writer

As electricity prices rise in sync with spring temperatures, Rochester resident Joyce Ramos has taken to drying her laundry on a clothesline rather than running her dryer.
So far, she's saved about $30 on her monthly electricity bill.

"It's really making a difference," she said.

Over the past year, electricity prices have surged by nearly 60 percent in SouthCoast, where electricity is delivered by the energy utility NStar. The price of electricity jumped from 7.134 cents per kilowatt hour in April 2005 to 11.206 cents per kilowatt hour in April 2006.

Thus, the total monthly bill for a typical household that uses 500 kilowatts hours per month has increased $19.71, from $83.74 last year to $103.45 this year, according to NStar spokesman Mike Durand.

Book shop owner Bev Pierce has tried to defeat her skyrocketing electricity bills by wearing more sweaters and lining the walls of her Rochester store with used books that act as insulation.

"It's horrible," she said of her electricity and gas bills, which have nearly doubled. "If they can put a man on the moon why can't they use alternative energies" to reduce energy costs for homes and businesses, she asked.

In New Bedford, soaring electricity prices have zapped the wallets of low-income residents, who cannot afford to pay their bills.

"Tons of people are coming in with shutoff notices," said Bruce Morrell, executive director of People Acting in Community Endeavors.

Tim Shevlin, executive director of the state Department of Telecommunications and Energy, which regulates the state's utilities, blamed the spike in electricity prices on the high cost of natural gas, oil and other fossil fuels that power plants burn to create electricity. Worldwide energy shortages — triggered in part by the growing economies of India and China — have increased the price of fossil fuels, he said.

Other world events, such as last summer's hurricanes in the Gulf of Mexico, have destabilized world energy supplies and sent oil prices soaring, Mr. Durand said.

He said that electricity delivery companies like NStar do not profit from increases in electricity prices, but rather pass the cost on to the customer dollar for dollar. "We sign contracts with generating companies for the best price we can get, and that's the price we charge our basic service customers," he wrote in an e-mail.

Some SouthCoast residents said they feel burned by the state Legislature, which approved deregulation of the electricity supply industry in 1998.

Deregulation proponents promised that deregulation would increase competition and bring customers lower electricity prices, better service and a greater selection of electricity suppliers.

But the promises have not been delivered, they said.

The notion that restructuring the electricity supply industry will lower electricity prices "just ain't necessarily so," said Ashley C. Brown, executive director of the Harvard Electricity Policy Group at Harvard University's John F. Kennedy School of Government.

"I think the way in which restructuring was sold to the public in Massachusetts and other states is just plain intellectually dishonest," said Mr. Brown, who has served as an advisor on infrastructure regulatory issues to governments in Brazil, India, Zambia and other countries.

The Massachusetts system was "rigged," since rate reductions during the first seven years after deregulation only deferred cost increases until a later date, he said. When the new, higher rates went into effect in March 2005, electricity customers "got a double whammy," since fuel prices were also climbing, he said.

The major failure of deregulation is that a competitive marketplace for residential customers has yet to develop, experts said. Unable to shop for a cheaper supplier, most residents have stayed with their traditional utility — NStar on SouthCoast and Massachusetts Electric in many other parts of the state.

Meanwhile, commercial and industrial electricity customers have benefited from a greater selection of suppliers, since their large consumption rates have created a more competitive market than for residential customers.

"Deregulation has generally been successful for larger commercial and industrial entities but it has not yet to trickle down to residential customers," Mr. Shevlin said.

As energy advocate Frank Gorke put it: "Residential customers have been left out in the cold." Mr. Gorke works for the Massachusetts Public Interest Research Group, which opposed deregulation and co-sponsored a ballot initiative in 1998 to repeal it, but lost.

Due to the "hands-off approach" of running the electricity system, the industry is missing out on opportunities to reduce electricity prices and protect the environment by increasing energy efficiency and investing in alternative energy such as wind and solar power, Mr. Gorke said.

"From a consumer perspective, no one is minding the store," he said.

Sen. Michael W. Morrissey, D-Quincy, who helped design the state's deregulation program, said it has fulfilled the promises of saving customers money and showing them "more truth" in the cost of electricity.

"The higher costs are due to hurricanes, war and supply," he said. "These issues would have happened regardless of deregulation. ... The only thing I'm disappointed with is that there are not more people in the market."

Sen. Mark C.W. Montigny, D-New Bedford, who was a former chairman of the state Senate Committee on Energy, was one of four senators who voted against the final deregulation bill.

"The utility industry and its lobbyist arm-twisting and scare tactics came through, and deregulation today totally benefits the industry," Sen. Montigny said in a statement.
"Once again, a consumer gets the short end of the stick."

Contact Becky W. Evans at
Date of Publication: April 16, 2006 on Page A06