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 though delivery charges have declined. That is because the utility has added a special commodity charge in May of about $10 for a 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 utilitys electricity supply revenues for the month with the actual market cost of electricity that it buys, according to a two-month lag.
National Grid charges customers in a complex way.
The utility now pays higher costs than anticipated in the month of March because there is a two-month lag between forecasted costs and actual costs. Monthly bills are based on the electricity forecast established at the end of the previous month. Depending on whether the forecasts are too high or low, customers are either credited or charged after a two-month lag period.
Despite the increase in May electric bills, household bills from the utility are projected to drop in the month of June, according to the state Public Service Commission. That is because the utility predicts the reconciliation of Aprils electric supply costs, which will impact June bills, wont be as extreme as it was for March.
The high and erratic electric bills customers have seen over the past few months are mainly because upstate New York experienced one of the coldest winters on record, said Virginia J. Limmiatis, National Grid spokeswoman. She said skyrocketing costs in January left customers with extremely high bills in March. 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 were 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 PSCs 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 last year.
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 collection of electricity costs from residential and small-business customers affected by increased commodity prices. Charges to collect that deferral will be spread out over six months.