By: Tim Knauss |
The rollercoaster ride known as your National Grid electric bill is on the upswing again. For a household using 600 kilowatt-hours a month, the bill in May will be about $101, or $27 higher than it was in April.
National Grid’s commodity charge for electricity is going up in May, despite a recent decline in wholesale prices, because of the complicated way the utility bills Upstate residents for power.
Believe it or not, your sky-high March electric bill from National Grid was not quite high enough. The utility will add a charge to your May bill — 1.69 cents per KWH, or about $10 for a typical household — to recover the remainder of its costs to provide your electricity in March.
That extra charge – called ESRM on your bill, for electricity supply reconciliation mechanism – will bring your total electricity supply charge to 8.4 cents per kilowatt-hour. That’s the second-highest supply rate of this already expensive winter, after March.
You may feel a bit of whiplash, because last month the ESRM knocked about $16 off the average household bill. National Grid deducted 2.6 cents per KWH to make up for overcharging in February.
For the same 600 KWH, National Grid charged $130 in March; $74 in April; and will charge $101 in May.
What’s the bottom line? Prices are up this year. Most households paid at least $80 more for electricity over the past six months than they did the previous year.
From December through May, the average commodity price of electricity (the “electricity supply” portion of your bill) has been more than 40 percent higher than a year ago. The difference – about 2.3 cents per KWH – translates into an extra $83 over six months for a household using 600 KWH per month. Many households use a lot more than 600 KWH per month.
Whose fault is it? State and federal regulators are trying to figure that out. The state Public Service Commission has asked the Federal Energy Regulatory Commission to investigate whether energy companies manipulated the market this winter to jack up prices. PSC officials expressed concerns that natural gas traders may have exacerbated gas shortages during periods of extreme cold weather, a tactic that could potentially drive up costs for gas-driven power plants.
Note: The PSC has suggested that National Grid and other utilities might do more to flatten out the price volatility for their customers, but regulators have not blamed the utilities for the overall price increases, which the utilities have no control over. The PSC has scheduled a daylong meeting of experts May 15 to discuss how to prevent vicious price spikes from recurring.
U.S. Sen. Charles Schumer, D-N.Y., has asked the Federal Trade Commission to do a probe of its own to determine whether utilities or other energy companies engaged in price gouging this winter.
What is the ESRM? Believe it or not, when National Grid proposed the ESRM in 2011, the utility and the PSC said it would help simplify your bill and make it more comprehensible.
“Customers will benefit from an easier to understand commodity price so that they can better evaluate their electric supply charges,” according to the PSC’s order approving the change.
Here’s how it works: National Grid forecasts the wholesale price of electricity each month, which becomes the “electricity supply” charge on your bill. For May, this price is 6.735 cents in Central New York.
In June, National Grid will figure how much it actually paid to buy electricity during May, and whether it was more or less than the forecast price. By the end of June, the utility will tell the PSC how much more money it needs to be made whole, or how much it must return to customers for overcharging them. That adjustment will become the ESRM for July.
Before this system was adopted in 2011, National Grid simply calculated a daily supply price that was an average of wholesale prices for the preceding 30 days. If your meter was read on May 7, you paid the May 7 supply price. On May 8 there would be a new price. That is still the way National Grid bills large commercial and industrial customers.