Electric Bills Skyrocket As Cape Light Compact Signs Deal to Buy Power
By JAMES KINSELLA
Thousands of Martha's Vineyard residents and businesses will see their electric bills jump by 30 per cent or more by next month.
The residents and businesses are members of the Cape Light Compact, an organization formed to represent consumer interests in the deregulated power industry. The higher bills will be derived from the December meter readings.
Higher oil and natural gas costs are driving up the price of electricity, compact administrator Maggie Downey said this week. The compact represents more than 183,000 customers on the Vineyard and Cape Cod.
The increased price of fuel to power plants that generate electricity is being passed along to the consumer, Ms. Downey said.
Much of the higher cost, she said, stems from the damage wrought this summer by Hurricane Katrina on the Gulf Coast, a key source of natural gas and oil for the electric power industry.
Kate Warner, a West Tisbury architect and director of the Vineyard Energy Project, estimated that the higher price would push the average monthly fuel bill for a Vineyard family of four from about $80 to $110 per month.
Ms. Warner said that estimate was based on a typical family's usage of 500 kilowatt hours per month. Using more or fewer kilowatts would raise or lower a consumer's monthly bill.
On the average 500-kilowatt-hour bill, Ms. Warner said, the increase would push the monthly fuel cost from about $35 to about $65. That is an annual increase of about $360.
The monthly electric bill includes other charges, which Ms. Warner said would average about $45. So the overall monthly bill for 500 kilowatt hours would rise from about $80 to about $110.
The Cape Light Compact price increase stems from a new 14-month contract signed by the organization with ConEdison Solutions. The Compact's previous contract was about to expire, and Ms. Downey said ConEdison offered the lowest price among three companies that were negotiating for the contract.
Under the price of the contract, the residential price of electricity would rise from 7.132 cents per kilowatt hour to 12.92 cents, an increase of 81 per cent. The price for commercial customers would rise from 7.169 cents per kilowatt hour to 13.37 cents, an increase of 86 per cent.
But because the price of power is just one part of a customer's electric bill, the percentage increase in the size of the overall bill would be lower, Ms. Warner said.
The bill also includes other costs, including charges for transmitting and distributing the power.
For the most part, Ms. Downey said, Cape Light Compact customers have been paying lower rates than commercial providers since the compact signed its first power supply contract in 2002.
But the new contract has pushed the compact rates above those offered by NStar Electric, the utility company that provides transmission services for Vineyard and Cape customers. NStar now is offering a residential rate of 11.2 cents per kilowatt hour and a commercial rate of 11.01 cents per kilowatt hour.
Current Cape Light Compact customers can opt out of the compact to get the lower NStar rate. No fee is charged for switching.
NStar, however, will seek a new rate in July, as the utility does every six months. If the NStar rate moves higher than the Cape Light Compact rate, customers can try to move back into the compact.
Ms. Downey, however, said that there is no guarantee the compact will take them back, because the organization may lack access to enough power to accommodate them.
If energy prices start coming down, Ms. Downey said, the compact may seek to negotiate a "blend and extend" contract with ConEdison, in which rates would fall over the long term in an extended contract.
Another way Compact members can pay a lower rate, at least for a few months, is by signing up for Cape Light Compact Green.
The program, which draws its electricity from renewable energy resources, is offering a rate of 8.9 cents per kilowatt hour from Jan. 1 to March 31. The rate is being offered to the first 3 per cent of residents in every Cape and Vineyard town who sign up for the program by Dec. 31. The charges also are tax-deductible. The program also will help fund solar panels for local schools.
As of Monday, the program still had room for Vineyard residents to qualify for the special three-month rate.
The compact web site shows that eight more accounts could qualify in Chilmark, 23 more accounts could qualify in Edgartown, 42 more accounts in Oak Bluffs, 45 more accounts in Vineyard Haven, and 18 more accounts in Tisbury.
Ms. Warner said the best way for consumers to keep their bill down is to use less electricity.
Turning off lights and appliances when they're not being used will go a long way to cut costs, she said. People also should look for Energy Star efficiency designations when they go shopping for new appliances.
Replacing ordinary incandescent light bulbs with fluorescent bulbs also will build savings over time, Ms. Warner said. From 3 to 6 p.m. on Dec. 21, she said the Stop & Shop in Edgartown and Cronig's Market in Vineyard Haven will participate in a program where fluorescent bulbs will be sold at cost.