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Electric bills to jump by nearly $30 this month for typical National Grid households; MED rate expected to stabilize

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POTSDAM - National Grid customers will get higher electric bills in May because of leftover expenses owed by the utility from one of the coldest winters on record.

A household that consumes 600 kilowatt hours a month will see its electric bills climb to about $101 this month, up by about $27 from April, according to utility estimates for its Central New York region. Commodity charges assessed by the utility have climbed from April to May, even through delivery charges have declined. That is because the utility has added a special commodity charge in May of about $10 for the typical household to cover leftover costs of supplying electricity to customers in March, when electricity bills peaked.

That extra charge will appear on customers’ bills under the name “ESRM,” which stands for “electricity supply reconciliation mechanism.” The charge is designed to reconcile the utility’s electricity supply revenues for the month with the actual market cost of electricity that it buys, according to a two-month lag.

Here is an explanation of the complex way that National Grid charges customers: The utility is now paying higher costs than it anticipated in the month of March because there is a two-month lag between forecasted costs and its calculation of actual costs. Monthly bills are based on the electricity forecast established at the end of the previous month. But depending on whether those forecasts are too high or low, customers are either credited or charged after a lag period of two months.

Despite the increase in May electric bills, household bills from the utility are projected to drop in June, according to the state Public Service Commission. That is because the utility predicts the reconciliation of April’s electric supply costs, which will impact June bills, won’t be as extreme as it was for March.

Erratic, high electric bills customers have seen over the past few months are mainly because upstate New York has experienced of one of the coldest winters on record, according ti Virginia J. Limmiatis, National Grid spokeswoman. She said skyrocketing costs in January left customers with extremely high bills in March, when customers were actually charged for those steep costs. And because costs were so high in March, customers are still paying in May for expenses triggered by the cold winter weather.

“Extremely cold winter temperatures have been unusual compared to the last five years” Ms. Limmiatis said. “In January we had back-to-back polar vortexes, and we’re still catching up from that.”

Low-income customers, however, caught a break on May electric bills from National Grid. In late April, the PSC approved an emergency relief program that allowed the utility to provide one-time credits, of either $20 or $250, for customers enrolled in low-income programs. The PSC’s approval of that relief package came after electricity prices for upstate customers in January, February and March were 122 percent higher than the same period of 2013.

Though National Grid expects electric bills to stabilize this summer, the cold winter will continue to haunt customers in 2014. In June, National Grid will begin recovering a $33.3 million payment deferral that it enacted in February to delay the collection of certain electricity costs from residential and small-business customers affected by increased commodity prices. Charges to collect that deferral will be spread out over a six-month period.

Meanwhile, Massena Electric Department officials say they are not expecting a dramatic hike for their customers in the next billing cycle.

Massena Electric Department Superintendent Andrew J. McMahon noted that the utility group will not know exact rates for customers until next week, but preliminary figures do not indicate a significant increase.

“We expect our bills to be coming down to historic norms. We won’t know specific numbers until a week from (Tuesday,)” he said. “We get the bill from NYMPA and that is where we had the biggest jump this winter. The indications we’re getting from them is that their pricing is getting back in line. … As a result, the customers can expect costs more in line from previous years around this time,” he said.

Mr. McMahon added that the department’s purchase power adjustment charge will be coming down significantly in May.

“We think people used a lot of power in April, but the rate for the purchase power is more in line with historical context,” he said. “Our 600 kwh a month customer would probably pay around $45.”

——

Staff writer Victor Barbosa contributed to this report.

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