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Norwich — The skyrocketing and volatile costs of transporting natural gas across the country will cause an increase in Norwich Public Utilities’ customers’ electric bills starting Sept. 1, but natural gas heating bills will remain stable, NPU officials said Tuesday.
NPU General Manager John Bilda presented a plan to the Board of Public Utilities Commissioners Tuesday calling for a 2.1-cent per kilowatt increase in the purchased power adjustment for all Norwich electric customers, raising the price from 3.2 cents per kWh hour to 5.1 cents.
The change means the average residential user who consumes about 500 kWh hours per month should see an electricity bill increase of about $10 per month, from $88 to $98. An average small commercial user of about 7,000 kWh hours per month could see a bill increase of about $147 per month.
A larger commercial customer using about 150,000 kWh hours per month could see an increase of $3,100 in the monthly bill, to a new total of about $23,727.
Bilda said NPU officials held a business breakfast meeting with commercial customers in June to warn them of the pending increase, a move large utility customers had requested two years ago when sudden increases in water and sewer rates alarmed businesses.
NPU Division Manager Steve Sinko said the utility tries to keep electric bills as stable as possible for customers, but that was not possible in the current volatile market. Sinko presented charts to the commission showing the cost on the spot market for transporting the nation’s ever-increasing supply of natural gas spiking to over $350 per megawatt hour last winter. At the same time, the New England region is becoming ever more dependent on power generated by natural gas plants.
Three years ago, the situation was reversed, as the greater supply of natural gas lowered costs. At that time, in November 2012, NPU reduced the purchased power adjustment in all NPU customer bills by 14 percent. Those savings now have been erased with the current increase.
“We’re back where we were,” Bilda said.
The purchased power adjustment includes a portion of the wholesale cost of energy not included in the electric base rates and covers price fluctuations in the market.
The volatile natural gas pipeline and transportation market is not expected to affect NPU’s recent push to expand natural gas lines throughout the city for heating. Bilda said NPU has a stable supply of natural gas delivered through pipelines into Norwich to supply homes and businesses. Purchased electric power from outside entities is the problem for the electric bills, he said.
“While we cannot control the cost of electricity we secure and deliver,” Bilda said, “we remain committed to helping all our customers manage their energy costs.”
NPU spokesman Chris Riley outlined several energy efficiency incentive programs offered by NPU, including rebates to residential customers for buying energy efficient air conditioners and free home energy audits. Commercial customers also qualify for rebates for lighting upgrades and no-interest financing for energy efficiency upgrades.
For information about energy efficiency programs, go to www.norwichpublicutilities.com.