Sticker Shock at the Meter – A Call to Action

By Cynthia A. Arcate 28 May, 2014

At a recent New England Power Pool (NEPOOL) meeting, a retail supplier cautioned ISO-New England about suggesting the winter natural gas supply constraints were costing customers hundreds of millions of dollars more than the previous winter. He explained that most customers will not pay those prices because customers generally buy electricity at fixed prices for a minimum of one year. PowerOptions members tend to lock in prices for several years. That’s not to say customers don’t pay the price, however.

Many of our members are renewing contracts they signed two or three years ago. They are in shock. Prices are 10 percent to 25 percent higher depending on when the member entered into their old contract. They haven’t seen these prices since the 2008 timeframe and they are confused. Watching energy markets is not their full-time job. While they know from our constant communications and reading the press that natural gas supply is a problem, they did not expect to see such a spike in their electricity price. The worst part of it is that there is no relief in the foreseeable future.

At that same NEPOOL meeting, speakers from various sectors attacked the proposal of the six New England governors to cut through the morass holding up pipeline expansion. The governors hope to establish an ISO tariff to ensure funding for expansion and streamline the process to make happen what the market doesn’t seem to be able to deliver – relief on the gas delivery system. More attacks, more of the same arguments we’ve been hearing for years with no solutions. If the so-called “other approaches” are so workable, why aren’t they happening? Meanwhile, customers suffer and so does the economy and the environment, as we continue to burn more oil and coal to make up for the unavailability of the natural gas-fired generation.

We need to stop talking and move forward. Instead of shooting holes in the New England governors’ proposal, let’s figure out how to make it work. Sure, there are legal ambiguities (e.g. Can it be done under the Federal Power Act? Who is going to manage the capacity? Should electric generators get priority on the expanded pipeline?) All of these questions are important and must be answered but do so and stop talking about the problem. The impact of this problem on customers is real and those who thwart the efforts to resolve the problem should not be allowed to slowdown working toward a solution anymore.

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