National Grid customers could be in for sticker shock this winter when they open their electric bills and find that costs have gone up by more than 60 percent from last year.
The utility filed its new electric rates for Massachusetts with the state Department of Public Utilities on Wednesday, and the outlook is not pretty: The monthly bill of the typical residential electric customer will rise from $179 last winter to $293 this winter, for a six-month stretch that begins on Nov. 1 — a 64 percent increase from the same time a year ago.
The reason? High natural gas prices.
Natural gas-fired power plants still provide at least half of New England’s electricity, despite efforts to shift the region toward renewable sources. Costs for obtaining gas have skyrocketed this year following Russia’s invasion of Ukraine and the subsequent natural gas shortage in Europe. As a regulated utility, National Grid passes through the cost of its electricity supplies from power plant owners to its customers with no markup. This winter, the cost of procuring the electricity will make up about two thirds of National Grid’s electric bills.
Helen Burt, National Grid’s chief customer officer, said National Grid procured its electricity supplies for the upcoming winter season in two tranches: one set of purchases took place in the spring, just as wholesale prices were starting to rise as a result of the Ukraine conflict; the other purchase happened earlier this month.
To help customers deal with the skyrocketing costs, National Grid has launched what it calls a “winter customer savings initiative.” Essentially, it’s an effort by the utility to highlight some of the options consumers have to mitigate the costs. They include programs for energy savings, flexible payments to spread out the expense, and discounted rates for customers with low incomes.
National Grid also filed with the state DPU last week for new natural gas heating rates last week; the British utility has nearly 960,000 natural gas accounts in Massachusetts. Typical residential customers should expect a 22 to 24 percent increase from last winter’s bills, or an additional $50 a month. The increase for heating costs is mitigated because National Grid uses a hedging strategy to buy natural gas over time, and a significant amount of the gas was procured before the Ukraine conflict began.
She said about half of National Grid’s 1.3 million electric customers in the state, roughly 665,000 customer accounts, still get basic service, meaning they rely on National Grid to procure the electricity supplies as opposed to shopping for a competitive supplier. Many households were switched in recent years amidst a trend of municipal aggregation, in which cities and towns make large purchases of electric supplies on behalf of residents, usually with a goal of increasing the amount of renewable electricity that they use.
National Grid and Eversource are by far the dominant providers of electricity and natural gas service in Massachusetts. It’s not yet clear what Eversource’s new electric rates will be for its January-June season in Massachusetts, though Eversource recently reported a huge rate increase for its electric customers in New Hampshire that took effect in August, reflecting the sharp run-up in natural gas prices this year.
Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.
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September 21, 2022 at 08:44PM
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Your electric bill may go up by more than 60 percent this winter. Here’s why. - The Boston Globe
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