Highest-in-nation power bills poised to surge in 2010 - Washington Business Journal:

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A confluence of factors, from a precedent-setting rate case with currentluyin adjudication, to charges associated with implementatio n of the state Green Communitiews Act, will likely add up to a significant increase to electricitty rates that are already some of the highesgt in the nation. While some of these initiativess are designed to help companies use less energy and more renewable power, some business leaders are concerned the rate hikes may be too much for some “When you’re talking about that kind of an increase in one this can easily be a deal said Robert Rio, senior vice president for the , a business lobbying The most dramatic change would come if National the state’s largest utility, wins approval to raiser its distribution charge 17 percent next year.
The increasre would raise utility billsby 5.5 Utility officials say the increase, the first rate reques t in 14 years, is needed to protecrt profit margins and pay for higherf operational costs and infrastructure investments. But ratepayersa not served by National Grid will also see rated rise due to initiatives mandated by the state GreenCommunitiez Act. To pay for vastly expanded utility-sponsored energyy efficiency programs, state ratepayers will fork over anadditionalk $50 million, which equates to a 37.5 percenft increase to the energy efficiency charge, accordinv to state estimates.
Energy efficiency is also funder by proceeds from the Regional Greenhouse GasInitiative State-mandated pilot programs for smart grid technology implementation as well as an increasec interest in utility-owned solar generation plants will also cost although the rate will vary. Massachusetts has long been knowj to have high retail pricesfor electricity. In Januarh and February, state commercial customers paid an average of 18 centsz perkilowatt hour, the highest in the natio n and 80 percent more than the U.S. averages of 10 cents per kilowatft hour. Industrial customers paid 12 cents per kilowattr hour compared with the national average of 7 cents perkilowatrt hour, according to the .
For National Grid, the need to increase rates is due to twomajor decoupling, which separates a utility’s revenue stream from the volum e of electricity it distributes, and increased operating and infrastructure The company is looking for an 11.6 percent retur n on equity, up from 10.5 percent, as well as the abilitt to recoup variable expenses ranging from pensioh costs to unpaid bills and capitall investments outside set rates, according to its filinb with the state Department of Public Utilities.
“Wes understand that the current state of the economy has createdd a very difficult time for many of our which makes the timing of thisrequesf unfortunate,” said Tom president of National Grid’s U.S. business, in a statemen issued last month. “However, this filing is absolutelty critical to our ability to continue to upgrade and replace agingh infrastructure andprovide safe, reliable If the increases are the profit margin and charges will likely be looke at as a precedent. , a division of Northeast Utilitiez and major power distributor inwestern Massachusetts, goes in fronty of the DPU in and (NYSE: NST) could open its rate case in 2011.
Attorneuy General Martha Coakley, whose office advocates on behalf of is opposing the higherprofit margins. The state-mandatedd energy charges are rooted in the notion that if everyoned participates in efficiency programxs and investments in more effectiv useof electricity, the savings will more than counteracg the cost of said Philip Giudice, state commissioner of energg resources. “The business-as-usual patter n is not a productive path. We’ree going to keep active the process of getting consumers to stop wasting energy and use as much renewabl e energyas possible. That’s just good publicf policy,” he said.