Massachusetts Winter Electric Rates Go Up (Again)
The bad news:
National Grid electric rates increased 21% on November 1, 2015.
The good news:
It’s not as bad as last winter’s 37% rate increase.
The persistent problem:
Over half of New England’s electricity comes from natural gas. Although prices have dropped in recent years, the demand for natural gas has been steadily increasing and regional infrastructure can’t keep up. Natural gas has also become a popular source of heating fuel, which means it’s in high demand during the dark and frigid months of January and February. When shortages occur and the aging pipeline fails to supply enough fuel, energy producers are forced to buy gas on the open market, often at much higher prices. This means that utility companies, like National Grid, who don’t generate the electricity they supply, must purchase it from producers at a higher rate, passing the cost on to customers.
Thankfully, energy producers don’t foresee as many shortages this winter, which is why the rate hasn’t jumped as high as last year. However, this does not mean the problem is going away any time soon. Due to continued gas pipeline constraints and the growing demand for natural gas, electric supply prices are expected to remain volatile and relatively high for 4-5 more years.
Many options are being considered to alleviate the problem:
- Increasing natural gas capacity through a new pipeline proposed to go through New York, New Hampshire, and Massachusetts. This has been a hotly contested issue and comes with serious environmental costs.
- Legislative action to force better cooperation between natural gas and electricity suppliers.
- Converting more energy production to large-scale renewables.
- Enhancing energy efficiency programs to reduce strain on existing infrastructure.
What can your business do?
Marcy Reed, President of National Grid in Massachusetts, has urged customers to keep their costs low by adopting energy efficiency measures. Take advantage of the 40-50% rebates offered by utilities to decrease your electricity demand. Energy efficiency upgrades are quick to install and quick to pay for themselves through their savings. You are paying for the rebates through a surcharge on your electric bill anyway, so why not take advantage?
National Grid also encourages customers to consider all available energy supply options, meaning you should shop around for a better supply rate. Massachusetts is a deregulated market so utility customers have the option of purchasing electricity through a supplier of their choice. And because utilities like National Grid pass on their supply rate with zero markup, they’re not losing money when you choose a new supplier (they make money on the delivery service). Regardless of which provider you choose, the utility will still deliver reliable energy and you’ll receive the same level of service and attention.