Massachusetts Electric Seeks Hike in Rates

BOSTON -- - Blaming the same factors behind soaring prices for gasoline and home heating fuels, Massachusetts Electric Co. said it is seeking a 44 percent increase in the cost of electricity for more than 350,000 of its customers, starting May 1.

Affected would be so-called default service customers, homeowners and businesses who opened an account after March 1998, when utility deregulation took effect. Mass. Electric asked the Department of Telecommunications and Energy to let it raise the cost of power from 5.135 cents per kilowatt-hour to 7.385 cents. The department is likely to approve the proposed rate quickly. For a typical homeowner using 750 kilowatt hours a month of electricity -- adding in the standard charges for transmission and customer service, plus fees for renewable energy and conservation funds -- monthly bills would jump to $96.80 from $79.93, or a 21.1% overall increase. Business customers can choose among several competitive suppliers who are likely to be able to offer lower prices. For Mass. Electric residential customers, however, currently the only competitive supplier is Pittsburgh-based Dominion Retail. Spokesman Daniel Donovan said Dominion expects to announce a new offer for residential Mass. Electric customers within days. "We're confident that we're going to have one that's lower than the default price," he said, but added he could not give details. Dominion has 750,000 gas and electric suppliers nationally and owns the Millstone nuclear generators in Connecticut. Competitive suppliers often require residential customers to sign up for long contracts whose prices in later years may be higher than what's available elsewhere. Michael Durand, a spokesman for NStar Electric, the state's second-largest electric utility, said NStar will propose new default service rates in late June. Mass. Electric's president, Cheryl LaFleur, said the company is proposing only to pass along increases in the wholesale price of fuel, particularly natural gas, used to generate electricity. "Our proposed increase is driven by the same market forces that have raised prices for heating oil and natural gas and [prices] at the gasoline pump," she said. Mass. Electric serves 1.2 million customers in 168 cities and towns, about 28% of whom are default service customers. The rest are under so-called standard offer rates, which are regulated by state law through 2004. The new default rate for power would be the highest since summer 2001, when it soared to 9.213 cents. Default power rates were under four cents from 1998 to 2000.

Mass. Electric asked the Department of Telecommunications and Energy to let it raise the cost of power from 5.135 cents per kilowatt-hour to 7.385 cents. The department is likely to approve the proposed rate quickly.

For a typical homeowner using 750 kilowatt hours a month of electricity -- adding in the standard charges for transmission and customer service, plus fees for renewable energy and conservation funds -- monthly bills would jump to $96.80 from $79.93, or a 21.1% overall increase.

Business customers can choose among several competitive suppliers who are likely to be able to offer lower prices. For Mass. Electric residential customers, however, currently the only competitive supplier is Pittsburgh-based Dominion Retail.

Spokesman Daniel Donovan said Dominion expects to announce a new offer for residential Mass. Electric customers within days.

"We're confident that we're going to have one that's lower than the default price," he said, but added he could not give details. Dominion has 750,000 gas and electric suppliers nationally and owns the Millstone nuclear generators in Connecticut.

Competitive suppliers often require residential customers to sign up for long contracts whose prices in later years may be higher than what's available elsewhere.

Michael Durand, a spokesman for NStar Electric, the state's second-largest electric utility, said NStar will propose new default service rates in late June.

Mass. Electric's president, Cheryl LaFleur, said the company is proposing only to pass along increases in the wholesale price of fuel, particularly natural gas, used to generate electricity.

"Our proposed increase is driven by the same market forces that have raised prices for heating oil and natural gas and [prices] at the gasoline pump," she said.

Mass. Electric serves 1.2 million customers in 168 cities and towns, about 28% of whom are default service customers. The rest are under so-called standard offer rates, which are regulated by state law through 2004.

The new default rate for power would be the highest since summer 2001, when it soared to 9.213 cents. Default power rates were under four cents from 1998 to 2000.