BOSTON — Many Massachusetts households are going to see their electric bills shoot up 37 percent this winter, a rate increase that some advocates fear will put additional strain on low-income families.Some energy facts from Save our Sound
State regulators approved the increase for National Grid household customers that would mean an average of $33 per month more for the typical residential customer and would push a typical monthly bill higher than $150.
Large-business customers will see even higher increases.
National Grid has almost 1.3 million residential and business electric customers in Massachusetts. The new rates take effect in November.
"This is pretty bad, and it's going to really have a bearing on a lot of Massachusetts households' abilities to just make ends meet this winter," John Howat, senior energy analyst at the National Consumer Law Center in Boston, told The Boston Globe.
The utility blame the rate hikes on the cost of buying electricity from power plants, which has soared because of an increased demand for natural gas used to generate electricity.
"This is something that's not within National Grid's control," spokesman Jake Navarro said. "This is a market-based problem."
The rate hikes will also hurt businesses.
"It's a very difficult thing, particularly for small businesses at a time when they're already struggling with the highest health care costs in the country and soon to be highest minimum wage," Jon Hurst, president of the Retailers Association of Massachusetts, told the Boston Herald. "All these things are required costs of doing business, and it's very difficult to be profitable."
NStar, with more than 1.1 million customers in the state, and Western Massachusetts Electric Co., with about 213,000 customers, also expect to seek rate increases, a spokesman said.
Those companies, both owned by Northeast Utilities, won't file their winter rate requests until later this fall.
Myth: Cape Wind would reduce consumer costs.
Fact: There is no savings to the ratepayer and, in fact, the power will be far more costly.
Significant adverse economic impacts
Cape Wind would result in a high net cost to the public due to duplicative subsidies and tax credits, increased electric costs, and negative impacts to tourism, jobs, and property values. The project would impose billions of dollars in additional electricity costs for businesses, households, and municipalities throughout Massachusetts. Scores of commercial fishermen, who earn the majority of their income in the area of the proposed site, believe this project would displace commercial fishing and permanently threaten their livelihoods. (Exhibit 1) A decline in tourism would lead to the loss of up to 2,500 jobs according to the Beacon Hill Institute at Suffolk University. Property values would also decline by $1.35 billion.
National Grid's contract with Cape Wind calls for a starting energy price of 18.7 cents per kilowatt hour, with a 3.5% yearly increase for 15 years. This contract is approximately 230% over the current market price of electricity, which is about 8.1 cents per kilowatt hour. Cape Wind's cost is more than double that of land-based wind power from Maine and elsewhere. The total costs associated with this contract amount to a $4 billion dollar energy tax above market price. This will be harmful to businesses and cities and towns across the state, who will have to cut jobs in order to pay for the extra costs in their energy bills. A typical suburban hospital will pay $30,000 extra for Cape Wind if they are a National Grid customer. Fuel prices are not expected to rise to the level of Cape Wind in the near future. By the end of the life of the contract, Cape Wind's power costs will be around 33 cents per kilowatt hour.
THE COST TO MASSACHUSETTS: The Cape Wind project represents a $4 Billion Rate Hike to MA households, businesses, and municipalities.
THE MONTHLY BILL: The cost of Cape Wind electricity for ratepayers starts at a price of 22 cents per kilowatt-hour (kwh) - almost 3 times current residential rates of 8 cents per kwh. Each year the price increases 3.5% leading to a final price of over 35 cents per kwh in year 15.