Electric games

Posted 10/22/15

A gift given with reservation is subject to suspicion. That’s how we reacted to National Grid’s request to reduce the rate for the standard offer from .104 cents to .089 cents per kilowatt-hour …

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Electric games

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A gift given with reservation is subject to suspicion. That’s how we reacted to National Grid’s request to reduce the rate for the standard offer from .104 cents to .089 cents per kilowatt-hour starting Jan. 1, 2016. This amounts to a $7.50 savings to a customer now paying $52 a month on the electric portion of their bill.

Of course, any savings is welcome news, but it was the admonition of the president of National Grid in Rhode Island, Tim Horan, that got us to dig a little deeper. In a press release, Horan said, “National Grid realizes that while this modest price reduction can be seen as good news, it may be the exception to the winter pricing rule.”

What we learned is that the new rate applies to a nine-month period ending as of Oct. 1, 2016. Usually, the Public Utilities Commission has National Grid work on a six-month procurement schedule starting on Jan. 1 and then again on July 1.

The nine months is being used so that a new, six-month procurement schedule – October to April and May until September – can be put in place.

What the PUC is attempting to do is level out the standard offer by mixing periods of high and low electricity costs. Although the consumer pays a fixed standard offer during the period, National Grid’s prices vary according to demand. Those prices fluctuate depending on the time of year with winter prices sometimes double those in the summer.

The reason, we are told, is tied to natural gas that is used to generate nearly 50 percent of the electricity used in this region. Because of pipeline constrictions, during cold days the demand for natural gas exceeds the system’s ability to deliver it. Heating demands are given priority, forcing generators of electricity to use more costly oil to generate or shut down.

Not surprisingly, this is being used as an argument by those looking to bring new gas lines into the region – a battle being waged by environmentalists in nearby Massachusetts.

But the question for us is, what’s going to happen? Will rates soar, as some believe they will, when the standard offer resets next fall? Will the new procurement schedule put in place by the PUC act to stabilize rates?

That’s why with this bit of good news, we ask, “When is the other shoe going to drop?”

National Grid spokesman David Graves offered sound advise when he said, “Shop around, ask questions and do what’s in your best interest.” Consumers do have options to the standard offer.

With that said, we’re glad to see the standard offer go down. And, we would add, be vigilant and keep your eye on what’s happening.

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