Mass: Power firms make rate-hike bids

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Power firms make rate-hike bids: Mass. Electric, Fitchburg G&E join list by Eric Convey Saturday, May 26, 2001

The rate-hike hammer loomed over customers of two more Bay State power companies yesterday.

The corporate parents of Massachusetts Electric and Fitchburg Gas & Electric asked state regulators to boost residential rates for customers in the ``standard offer'' class.

Mass. Electric serves about 1 million customers.

A typical Mass. Electric household using 500 kilowatt hours of electricity a month would pay $62.69 under the proposed rate - up $6.15, or nearly 11 percent.

A comparable Fitchburg customer would also see his average bill grow $6.15, bringing it to $72.17 from $66.02. That's an increase of 9.3 percent.

The new rates would take effect this summer, if they are approved by the state Department of Telecommunications and Energy. The agency is also weighing rate-hike requests from NSTAR, the parent of the old Boston Edison, Cambridge Electric and Commonwealth Electric.

The utilities have attributed their requests for higher rates to rising costs of the two major fuels used to generate electricity in New England: oil and natural gas.

Neal Costello, general counsel for the Competitive Power Coalition, which represents generating companies, agreed yesterday that fuel costs are a big factor.

``Oil and gas prices are undeniable. That's an international problem . . . a large part of the increase is directly attributed to the rise in international fuel costs,'' he said.

But Costello also said, ``the utilities have not done a good job at managing risk . . . so that you don't leave your customers exposed to spot-market price spikes.''

Utilities have insisted that they've taken steps to protect consumers against fuel-driven price spikes.

Consumer activist groups called for investigations of power generating firms on news of the latest rate hike bids yesterday.

``The question of whether this is price-gouging has not been addressed, and the sooner it is the better,'' said Derek Haskew, a Massachusetts Public Interest Research Group spokesman. ``An investigation of market manipulation can not happen soon enough.''

While generating companies say any probes of the market should look beyond their doors, two studies already under way are expected to be complete this summer.

After repeated delays, a study into the wholesale power market for the regional power coordinating group, ISO New England, is expected next month.

Also, Attorney General Tom Reilly recently hired experts to study power pricing. ``Preliminary findings are expected later this summer, probably in August,'' a spokesman said.

http://www.bostonherald.com/business/business/powe05262001.htm

-- Martin Thompson (mthom1927@aol.com), May 26, 2001


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