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March power brings a May glower

Average utility bill up $26 from April

Saturday, May 3, 2014
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— If your electric bill is high this month, blame March.

While most people expect their utility costs to drop as spring progresses, the average residential National Grid customer in the Capital Region will get a May bill for $102.44 — up nearly $26 from April, when customers were just reveling in bills that were nearly half that of the previous month.

“We’ve been getting a lot of customer calls because the price is so high,” said National Grid spokesman Patrick Stella. “We did send an email out a couple weeks ago to all the customers we had an email address for and told them there could be some price fluctuations, so we try to inform them ahead of time.”

The spike is all March’s fault.

In the last week of every month, National Grid forecasts what it expects electricity supply costs to be for the upcoming month and then factors that into a customer’s bill.

Those forecasts are based on what the average temperature was for the upcoming month over the past 30 years.

In the Capital Region, the average temperature in March has historically been 35 degrees. This March, when winter was refusing to quit, the actual temperature averaged 27.7 degrees.

So National Grid’s forecast was off. One of the ways it makes up for these variations is demonstrated by a line on your bill dubbed ESRM, or the Electricity Supply Reconciliation Mechanism.

The figure listed is the difference between what National Grid thought your electricity would cost and what it actually cost.

“And that shows up two months after the fact,” said Stella.

In May, the ESRM was $10.17. The biggest ESRM this winter was $39.64 — the result of a bad forecast for January reflected on customers’ March bill, which was about $150.64 in the Capital Region, the highest all winter.

It’s hardly a surprise why the forecast was bad.

Temperatures sank below zero six times in January and the Albany area tied a record for the coldest average daily temperature that month with 3 degrees on Jan. 6, equaling a record set in 1918.

High demand for natural gas also is to blame. Over the past five years, natural gas costs dropped so much that many electricity suppliers began switching their plants over from coal or oil to natural gas.

Inventories of natural gas are only just starting to climb again after an unusually cold winter depleted supplies. Prices are up 13 percent so far this year.

The cost of supplying electricity rose every month this winter except for November and April. In May, it will rise 38.5 percent in the Capital Region.

The cost of delivering electricity, which is how National Grid makes its money, has fluctuated much more, dropping, then climbing and then dropping and then climbing with each passing month.

In May, delivery rates will fall again.

National Grid doled out $32 million in temporary credits in February to help customers with high bills.

The average customer in the Capital Region was credited with nearly $43 that month.

The utility company has some extra credits to offer people this month, too, through three different programs for low-income customers.

Depending on the program, customers can get a one-time credit on their electricity bill of anywhere from $20 to $250 this month.

 
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