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Crying foul over cost of power

What’s more, the utility’s spokespeople state, it makes no profit on the supply side of the bill, simply passing along to customers the going rate for electricity from regional power generators. The profit and cost of doing business comes from the other half of the bill, the "delivery" portion that covers the transmission and maintenance of power lines and hookups to homes and businesses.

It was a tough week for customers of National Grid, the power company that serves 17 Berkshire communities. Residences and businesses that hook up to WMECO will have their turn to voice outrage in about six weeks when that utility releases its January to June 2015 rates.

"Rate shock" is what Attorney General Martha Coakley called the exorbitant spike in electricity delivery rates that National Grid will be billing in November through April. The Democratic candidate for governor is in a tight race against Republican Charlie Baker, but she probably would have pushed back anyway.

It will be fascinating to see if the utility accepts her proposal to spread out its rate increase over the next 12 months, easing the blow to customers’ checkbooks during the peak-usage winter season. I wouldn’t bet on it, but hope I’m wrong.

We’ve heard the "c" words -- conspiracy and collusion -- used by some folks, including a few government officials, who question the "coincidence" of the power company’s 37 percent increase in cold-weather delivery rates, compared to last winter, blaming it on anticipated tight supplies of natural gas.

Odd, they say, that this coincides with energy giant Kinder Morgan’s push for a new 250-mile Tennessee Gas Co. pipeline to carry hydrofracked, high-pressure natural gas through the county and across the state to customers such as Berkshire Gas and, yes, National Grid.

Why did the state Department of Public Utilities rubber-stamp the rate hike, people wonder.

The answer, according to officials from the state Energy and Environmental Affairs office, is that the DPU has no control over the supply side of the utility bill.
That’s fueling the overall price spike, covering the purchase of power from electricity generating companies which complain that the shutdown of the Vermont Yankee nuclear plant and a North Shore coal-generating plant is leading to a potential shortage because there’s not enough natural gas available to compensate. All the DPU does, according to the state, is to make sure that power companies bid for the best-possible price from competing electricity providers.

National Grid’s officials point to an expected natural gas shortage in New England, though not specifically in Berkshire County. In upstate New York, where existing pipelines already provide an ample supply, the utility expects customers will see bills that are 9 percent lower than last winter’s -- even though the company took a $945 million hit because of a new software system that was highly flawed.

What’s more, the utility’s spokespeople state, it makes no profit on the supply side of the bill, simply passing along to customers the going rate for electricity from regional power generators. The profit and cost of doing business comes from the other half of the bill, the "delivery" portion that covers the transmission and maintenance of power lines and hookups to homes and businesses.

It’s all very complex, so it’s not surprising that many customers are crying foul and demanding to know "the rest of the story." Sad to say, we can provide no easy answers here.

But we can praise the Berkshire communities whose leaders had the foresight to see all this coming, and to partner up for a bulk purchase of electricity supply from Colonial Power Group at a 25 percent lower rate than National Grid is now charging. National Grid will remain responsible for transmission and final delivery, so if a line goes down, that’s who you’re gonna call.

Residents and some businesses in close to a dozen towns and one city -- North Adams -- will see some benefit, compared to their neighbors in 20 towns and one city -- Pittsfield -- that did not go this route.

There will still be pain at bill-opening time, only somewhat less of it. We know some folks who were paying $300 a month for electricity at the height of last winter’s especially costly heating season. This winter, if they use the same amount of power, they’ll write checks for $375 a month, instead of National Grid’s $411, enough of a savings for one fill-up at the gas station.

But every bit helps, and folks who live in the communities that didn’t go through the two-year process to sign up for bulk purchases have the right to ask their mayor, town manager or Select Board why they didn’t join the discount club.

More power to Coakley in her effort to rein in the utilities. But, to cite the 1967 Stephen Stills lyric performed by Buffalo Springfield in a very different (wartime) context -- "There’s something happening here, what it is ain’t exactly clear."

Clarence Fanto writes from Lenox. He can be reached at cfanto@yahoo.com or on Twitter, @BE_CFanto.


Source: http://www.berkshireeagle.c...

OCT 5 2014
https://www.windaction.org/posts/41382-crying-foul-over-cost-of-power
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