Eversource says natural gas prices to blame for ‘likely’ electric bill hike
Eversource electric customers are likely to see a portion of their energy bills increase this winter.
On an earnings call Wednesday, Eversource Executive Vice President and CFO Phil Lembo said customers in Massachusetts and Connecticut could face a retail electric price hike starting Jan. 1 due rising prices at natural gas power plants, which produce power on cold winter days.
“This January, customers in Massachusetts and Connecticut are likely to experience an additional 2- to 3-cent increase due to higher gas prices driving power production,” Lembo said. “This would be an additional $20, $25 per month for a typical residential customer compared with last winter.”
Lembo said electric customers normally see price hikes during the winter as natural gas heating demand goes up and puts greater stress on the region’s pipeline infrastructure.
But the utility said the expected winter price hike this year is higher due to other compounding factors like a spike in global demand for natural gas, supply issues due to extreme weather in gas-producing states, and the lingering effects of the COVID-19 pandemic.
“Wholesale electric prices were extremely low in 2020. In fact, they were at a 10-year low, so the percentage increase that we’re reporting here comes off some very low base numbers from last year,” Lembo said on the earnings call. “As a reminder, increases and/or decreases, in the energy component of our electric bills are pass-throughs,” he said. “We earn nothing on providing this procurement service for customers.”
The rate increase comes as Connecticut recently approved a settlement with Eversource.
That deal allowed the utility to avoid long-term financial penalties over its response to Tropical Storm Isaias, and instead it favored a lump-sum payout to customers that will yield most ratepayers a roughly $35 bill credit over two months.
Eversource said customers should act now if they anticipate needing bill assistance in the coming months.
“We recognize that any increase in energy bills adds stress to the household budget,” Lembo said. “We’ve redoubled our efforts again to urge customers to take advantage of the more than $500 million that we have available on energy efficiency initiatives.”