Massachusetts NSTAR Electricity Prices to Rise

Electricity TransformerNStar has filed with the DPU for a rate increase for its Massachusetts customers effective January 1.

Customers will see their NSTAR electricity prices rise by 22% to $0.0933/kWh for the six months ending June 30, 2013.  Interval meter customers will see rates of $0.13/kWh for the first two months of that period.  Part of the reason for this price increase is the limited natural gas pipeline capacity in the Northeast, with the increasing dependence on natural gas for both heating and electricity generation.

Two-thirds of Massachusetts’ electricity and more than half of New England’s power is generated by natural gas, according to the US Energy Department, so when the price of natural gas goes up, so do electricity costs. Wholesale natural gas prices in the region have spiked in recent winters when supplies delivered through pipelines could not keep up with demand during extended cold snaps.

The Energy Department has raised concerns that the region’s reliance on natural gas could lead to jumps in the fuel’s price this winter.

NStar and National Grid said the electricity they have purchased from power generators for the winter season is more expensive, so residents can expect to see their costs rise by several cents compared to last year.

Companies that obtain fixed price contracts for their electricity and natural gas have the ability to control their prices and protect themselves from the dramatic price fluctuations that sometimes occur in the market.