21.7% Electric Rate Increase Requested

This was the ProJo’s headline last week. Actually it was a story about a rate increase request made by National Grid.

 

What about the Pascoag Utility District (PUD)? Will PUD’s electric customers’ rates be spiraling upward also? Well there is good news and some not so good news!

 

First and foremost PUD has requested the RI Public Utilities Commission to maintain our rates, at today’s level, for the rest of 2008!

 

Pascoag Electric’s rates were raised in August 2006 and were not adjusted again until January of this year when they were raised 2.2% to account for higher Transmission rates from National Grid and the New York Independent System Operator for transmission of our New York Power Authority Hydro Power allotment. That represented 18 months of stable (and very competitive) rates!

 

Pascoag continues to receive a large portion of its purchased power under a contract that calls for the provision of energy at a cost of 7.8 cents/kWh. The market price recently has been pegged at between 10.2 cents/kWh with some future trading at 14 cents/kWh!

 

RI residents served by National Grid will now see 12.4 cents/kWh for the Standard Offer portion of their bill sooner rather than later, while PUD customers remain at 5.942 cents/kWh. The bad news is that our contract that I referred to above ends in 2010. Prior to that PUD will also be negotiating new contracts. They are expected to be MUCH higher! The Board of Utility Commissioners, the RIPUC and the Division of Public Utilities and Carriers, as well as the Management Team here at PUD, are working together to explore many options right now, as opposed to waiting until 2010.

 

Amongst those options is PUD’s participation in two new Generating Plants owned by and operated for Public Power Systems, such as ours. We continue to be optimistic regarding the competitive pricing of the output of these plants. Additionally, we are considering requests for “moderate” rate increases during 2009 and the 1st half of 2010 to ameliorate any potential for substantial increases associated with new contracts. Please be assured we are working diligently to keep rates as low as possible without sacrificing the highest level of Customer service.