Natural Gas Debacle In New England

Updates

December 19, 2013: update as reported by regional newspaper. 
 

Original Post

Regular readers know what this is all about. 

Link here.

Speaking at the N.H. Business and Industry Association Energy Seminar last week in Manchester, Jim Shuckerow, director of energy supply for Northeast Utilities, predicted there would be no new "iron in the ground" into New England until 2020, with natural gas prices expected to continue to rise from their 2012-2013 low-water mark between now and then."Perhaps 2013 will be recalled as the good old days of power-supply pricing," he said.

From the link:

Public Service of New Hampshire announced on Friday that it would ask regulators to approve an energy charge of 9.23 cents per kilowatt hour, effective Jan. 1, an increase of .61 cents per kwh from the current rate of 8.62 cents.

That means the average residential customer, using 500 kilowatt hours a month, would see the energy service portion of his or her bill go from $43.10 to $46.15 per month. Other charges, such as transmission fees, are not expected to change significantly in 2014.

The state's largest regulated utility had predicted in October that it would need an energy supply charge of 8.99 cents for 2014. In the months since, fluctuations on the wholesale energy market and uncertainty about future prices prompted the utility to seek the higher rate in its year-end filing.

A reader sent this link to a "letter to the editor" regarding this debacle:

Winter hasn't officially commenced yet, but the early returns don't bode well for New England's electricity market and its ratepayers.

In the past month, we have seen wholesale electricity prices climb to 30 cents per kilowatt hour for four-hour stretches — and natural gas prices at New England zones have exceeded seven times the national average. On Thursday, the New England Independent System Operator, the organization that manages the region's grid, issued an alert for all of New England due to capacity deficiency. ISO has been saying for more than a year now that New England is becoming too reliant on natural gas for electricity generation and reality has reared its ugly head — in the form of ever-climbing electricity rates for residents and businesses.

For the past week or so, New England's "fuel mix" for electricity generation has seen nuclear and coal plants exceed 100 percent of their capacity, while natural gas plants have been running at less than 50 percent of installed capacity. Some of this can be attributed to seasonal variations — the result of local distribution companies purchasing firm capacity to supply their customers with home-heating fuel to keep their homes warm — leaving the "scraps" and higher prices to generators. LDCs are able to secure contracted pricing for their natural gas, which insulates them from paying the spot market prices that natural gas electricity generators are forced to pay — which has led to wholesale electricity prices exceeding 30 cents per kilowatt hour for extended periods of time.