You may have noticed this winter that your National Grid bill was high. Really high. So much so that U.S. Sen. Charles Schumer has called for an investigation into possible rate gouging. Bills this year were, on average, 60 to 75 percent higher than last year (that’s according to New York Attorney General Eric Schneiderman.) April’s bills were somewhat lower, but it looks like May’s are going to be higher once again. Here’s why, according to an article in today’s Watertown Daily Times:
The utility has added a special commodity charge in May of about $10 for a typical household to cover leftover costs of supplying electricity to customers in March, when electricity bills peaked…That extra charge will appear on customers’ bills under the name “ESRM,” which stands for “electricity supply reconciliation mechanism.”
Basically, there’s a two-month lag in your bill between what the company thought it would cost them to deliver your energy and what it actually costs. So if it cost National Grid more than it anticipated to deliver your energy in March, you’ll pay the difference in May. (If it costs less, by the way, you’ll get a rebate. But we haven’t seen much of that this year.)
And get comfortable with higher bills: The WDT article says that although National Grid expects rates to stabilize this summer,
In June, National Grid will begin recovering a $33.3 million payment deferral that it enacted in February to delay collection of electricity costs from residential and small-business customers affected by increased commodity prices. Charges to collect that deferral will be spread out over six months.
More on that deferral here.
“How could this be???”
By the way, if you’ve opened up a huge utility bill and said, “how could this be???,” you may find this explanation, from cnycentral.com, quite useful (there’s also some useful information here, from the Albany Times-Union). It also addresses why prices seem to be so much higher during really cold winters like the one we’ve just had:
[National Grid’s Melanie] Littlejohn says the extreme cold temperatures cause homeowners to use more energy to stay warm. Because natural gas is diverted for residential use, the power companies which supply National Grid are forced to generate electricity with more expensive fuels such as oil and coal. National Grid passes along the higher priced electricity to you. “Whatever we purchase it at, that’s what we pass along. No markup, contrary to popular believe. Whatever we buy it we pass that along directly to the customer.”
So there you go.