Worcester Business Journal

12 Worcester Business Journal • October 12, 2015 www.wbjournal.com Utilities grapple with yo-yo pricing and supply FOCUS Energy Riding the natural gas roller coaster N atural gas customers throughout New England got an early holiday present as National Grid and Eversource announced that while gas prices will seasonally increase this winter, they will be down compared with last year. However, even though the majority of electricity gen- eration in Massachusetts is from natural gas, electricity customers will not see the full effect of this year-over- year decline. In fact, that reliance on natural gas for elec- tricity generation is one of the main reasons for the state's volatile electricity prices that rise in the winter. In September, both National Grid and Eversource announced their gas prices for the next six months as they had sub- mitted them to the Department of Public Utilities. Eversource has submit- ted gas prices that will be 31 percent less than last year's price, at 51.71 cents per therm, down from last November's rate of 74.43 cents. For the average residen- tial customer, this could mean $30 less a month than last winter, according to the company. For National Grid, the price is also down — although not as sharply — from 67 cents per therm last year to 52 or 53 cents depending on region, with the average residential customer expect- ed to save between $5 and $7 a month compared to last winter. These prices are down largely due to lower natural gas commodity prices, increased liquid natural gas in the area and more natural gas storage, Eversource spokesman Mike Durand said. Gas customers aren't the only ones who can expect savings this season. Home heating oil prices are also expect- ed to be low this winter. With a barrel BY SAM BONACCI Worcester Business Journal Staff Writer The ISO New England control room in Holyoke manages energy transmission throughout Massachusetts. of oil trading at just over $42 and expected to remain low, this will be a good season for oil heat, said Michael Ferrante, president of the Massachusetts Energy Marketers Association, which represents oil distributors. "Crude oil prices have been really low, and consumers are feeling that on refined products, and those products are everything from gasoline to oil to heating oil," Ferrante said. The Sept. 30 heating oil price of $2.38 is $1.22 less than the price was a year earlier. Electricity rates are rising in the region, however, and unlike natural gas and oil, it will not have a large drop from last year. The National Grid rate of 13.1 cents per kilowatt hour for electricity — which is calculated based on rates secured from generators — over the course of the next six months is a 21-percent increase com- pared with the current rate. While this represents a 9-percent decrease compared to prices last winter, those prices were a staggering 37-per- cent increase over the previous year, meaning electricity prices will still be relatively high this winter. Coal Oil Natural gas Hydro Nuclear Renewables Wind Other Coal Oil Natural gas Hydro Nuclear Renewables Wind Other 13% 7% 37% 12% 22% 5% 4% 3% 1% 1% 12% 30% 17% 13% 20% 3% Evening peak: January 30, 2015 Evening peak: February 15, 2015 Source: ISO New England Energy mix The sources of electricity production fluctuates on a daily basis as natural gas resources are called upon for heating in New England, resulting in more reliance on oil and coal generation. P H O T O / C O U R T E S Y

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