Region facing higher electricity supply prices for winter season
Due to an increase in the cost of electricity that National Grid buys for its customers, Rhode Islanders can expect to pay more for electricity this winter. For the second consecutive winter, most of the region will be confronted with higher electricity supply rates. On Wednesday, National Grid submitted its proposal to the Rhode Island Public Utilities Commission (RIPUC) for Standard Offer Service (SOS) rates, which represent the cost of electricity that National Grid buys for customers and passes on without profit.
National Grid’s residential SOS rate in Rhode Island decreased in April to 8.486 cents per kilowatt hour – one of the lower rates currently offered in the region – but under current conditions the residential SOS rate will increase to 12.129 cents per kilowatt hour for the winter season if approved by the RIPUC. The new rate would result in a typical residential customer seeing an increase of $18.97 on their total monthly bill or a 19 percent increase for the same amount of electricity used.
As part of its filing letter to the RIPUC, the company also noted that the commission has the discretion to approve an alternative SOS residential rate of a longer term, which could spread out the increased price of electricity to customers over a 12-month rate period. Under that scenario, the SOS residential rate would be significantly lower than the proposed six-month winter rate, but customers would not see a decrease in April, when prices are expected to be even lower than they are now.
“There’s no question, these higher energy prices are a major concern for us and our customers,” said Timothy Horan, president of National Grid in Rhode Island. “And while we don’t control the supply cost of electricity, we do have energy saving programs and other measures available to help our customers take control of their bills. When the region is facing such high electricity supply prices, its critical that our customers recognize how participating in these programs can put them in charge and lower their energy costs.
The electricity supply rates representing the cost at which National Grid buys electricity and delivers to our customers is adjusted twice a year for residential and commercial customers. The new SOS rates, if approved by the RIPUC, are effective from October 1, 2018 through March 31, 2019. Electricity supply prices are determined by the market, and SOS rates represent the cost for electricity purchased at those prices. National Grid passes this cost along to its customers without any mark-up.
There are several driving factors as to why the region has seen higher winter rates the past two years.
The recent retirement announcements of several power plants in the region. While the closing of coal-fired power plants is a positive step forward for the environment the closures do have short-term impacts on the markets and regional energy supply.
New England went from having an anticipated surplus of power generation to a much lower availability of supply for a certain period of time.
Electricity supply prices typically rise in the winter because of continued constraints on natural gas pipelines serving the region. More than fifty percent of New England’s electricity generation is now fueled by natural gas.
As the availability of natural gas decreases at times of peak demand, some generators are forced to buy gas on the spot market at higher gas prices, switch over to alternate fuels or not run at all.
What Can Customers Do To Prepare For the Higher Rates?
Many customers will use less electricity in the winter months than what they need in the summer months, but the best way for customers to try and decrease their bills is by becoming more energy efficient in their energy use year round. Customers are encouraged to visit www.ngrid.com/save for energy savings tips and incentives on a wide variety of energy efficient home equipment, from smart power strips and programmable thermostats to high-efficiency furnaces and boilers.
For example, replacing a minimum of five incandescent lights with ENERGY STAR light bulbs could provide a typical savings of $9 a month. Recycling or getting rid of a second, older refrigerator could save customers $23 a month. For more tips on how to lower your energy bills, customers can go visit www.nationalgridus.com/RI-Home/Energy-Saving-Tips.
National Grid also offers many programs to help customers manage their costs:
National Grid offers budget plan programs to help customers spread payments out more evenly across the year, which are particularly helpful to those on fixed incomes. This service is available to customers all year long.
Billing options and discount rates also are available to help eligible customers who may have difficulty paying their monthly gas or electric bill. Discounted rates are based on service area and certain eligibility requirements.
For more information about bill assistance, customers should contact National Grid at 800-322-3223. Customers can also visit www.ngrid.com/billhelp.
When it comes to the supply portion of the bill, most customers also have the option to choose from a variety of competitive electricity suppliers. Customers can perform their due diligence and explore other supplier options at www.ri.gov/empowerri or on our website at www.nationalgridus.com. Regardless of a customers chosen supplier, National Grid will continue to deliver reliable electricity, respond to service and emergency needs and provide storm restoration services.