Utility cuts electric, gas rates
By DAN MORIARTY
Staff Writer
WESTFIELD – City residents heating with natural gas will have a few more dollars in the pockets at the end of the month as new gas and electric rates went into effect Wednesday.
WG&E General Manager Dan Howard announced the rate cuts at the Municipal Light Board meeting Wednesday night. The “average” gas heat homeowner will see a savings of $9 for gas and an additional $3.50 in electric rate for a total of $12.50 per billing cycle.
“These reduced supply rates are significantly lower than last February (2011), lower than January (2012) and continue to make our customers’ energy bills among the lowest in the state,” Howard said.
MLB Chairman Tom Flaherty commended Howard and his supply management team for diversifying the utility’s supply portfolio, a process that reduces risk and helps the municipal utility to stabilize its rate structure.
“The rate drop is great,” Flaherty said his morning. “It’s significant; it’s real on both sides of the bill. Dan and his team have been doing a heck of a job managing the department’s supply accounts, locking in lower rates.
“The unusually warm weather this winter has resulted in a glut in the supply of natural gas, but what people don’t understand is that the cost of transporting that gas to the city is actually more expensive than the cost of the gas.”
Howard addressed that transportation cost versus the gas supply cost in a Pulse Line response printed in the Westfield News on Jan. 18, 2012. A caller had question why the local gas rates were not reflecting a sharp decline of the gas supply cost as listed on the NYMEX.
“Just keep in mind that the published wholesale cost of gas, or NYMEX futures pricing that you are referring to, is indicative of the cost where the gas is produced.”
“However, pipelines that transport gas to New England are at full capacity, which restricts how much gas can be supplies into New England, and, which in turn, causes New England prices to remain higher than those where the gas is produced.”
“During 2011, the average WG&E residential customer has the lowest gas bill in the state. And we expect WG&E customers to continue to save on their (gas) heating bills. We are projecting that our customers will pay about 4 to 5 percent less to heat their homes in 2012 compared to 2011, assuming the same consumption.”
Howard said this morning that gas demand has dropped 20 percent so far this winter because of the mild weather, but added that the cost of transporting gas to the region has increased.
“There are so many different components to the customers’ bills,” he said.
Flaherty, who works in the energy commodes market, said that “transportation costs have gone up significantly over the past 18 months.”
