Premium for backing renewable energy would rise
About 8,000 NStar customers who pay a premium to ensure that a portion of their electricity is generated by wind could be hit with a rate hike that will increase their monthly bills by as much as 16 percent by next month.
NStar spokesman Michael Durand said yesterday that the increase “is beyond our control.’’
“We have to sell energy for what we pay for it,’’ he said. “This change is a way to reconcile the cost of the Green program with fluctuating energy prices.’’
The program, which enables customers to support electricity generated from renewable sources, offers the choice of having half or all of a customer’s electricity use support wind power for a premium.
If approved, the rate hike that NStar is proposing to take effect on April 1 would increase the premium for customers in the 50 percent plan to 2.356 cents per kilowatt hour of power from 0.837 cents per hour, raising the average bill by about $7.50. For those electing to have all their electricity use powered by wind, the premium would rise to 4.435 cents per kilowatt hour from 1.396 cents, adding about $15 more per month.
Lisa Capone, a spokeswoman for the Massachusetts Department of Public Utilities, said the agency is reviewing NStar’s request. The complicated pricing and regulatory factors that go into calculating NStar’s Green premium rates “are really confusing for customers,’’ said Sue Reid, a senior attorney with the Conservation Law Foundation.
“We hope this won’t have a negative impact on the program. We hope people will continue to support this option,’’ she said.
The news angered at least one NStar customer. David Baeumler, a writer and filmmaker who lives in Jamaica Plain, has been paying “an extra five or six bucks a month’’ for more than a year for the utility’s green program. When Baeumler read that an average customer like him would be paying an additional $15 for the service in an e-mail from NStar earlier this week, it “felt like a slap in the face,’’ he said.
“It’s more than just the hit to my wallet,’’ Baeumler, 39, said yesterday. “What worries me is what effect this will have on everyone who felt concerned enough to sign up for the program.’’
The move comes just after NStar chief executive Thomas May in January told Globe editors and writers that the utility was “disappointed’’ that participation in the company’s Green program was not greater.
“We thought it would do better,’’ he said.
Lori Bird, a senior analyst at the National Renewable Energy Laboratory who has studied green pricing, is not surprised at the level of participation in the NStar program. Of the 25 percent of the nation’s utilities that offer premium green programs, Bird said, most enroll about 2 percent of a company’s total customer base.
Meanwhile, John Rowe, chief executive of
“When they [utilities] charge a premium for wind power - lets say that’s the most economical - and natural gas is high, that premium can be really small,’’ he said. “But if gas goes down - and it’s gone down from $14 to $5 - that premium is actually big.
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