BOSTON — High oil prices, new offshore wind power and an uncertain winter forecast are colliding to make Massachusetts electric bills hard to predict this season, CommonWealth Beacon reported Friday, Nov. 13.[1] The clearest signal is heating oil, whose cost is up 60% from a year ago.[1] The story is part of our Boston news coverage.
Related: Massachusetts Gas Prices Fall Below $4 a Gallon.
Why oil matters for electricity
About half of New England’s power comes from natural gas. When cold weather drives up gas demand for heating, some power plants switch to oil. Last winter, the coldest in 20 years, oil made 28% of the region’s power and at times more than 40%.[1]
This year oil is much more expensive, while New England natural gas prices are lower than a year ago. That could leave customers paying either higher gas prices or for costly oil-fired power if the grid needs it.[1] “I have no clue what’s going to happen this winter on prices and costs,” said Dan Dolan of the New England Power Generators Association.
What could help
New power from the completed Vineyard Wind and Revolution Wind projects and forecasts of a milder winter could reduce the need for oil.[1] ISO New England, the grid operator, expects peak demand slightly above last winter’s.[1]
Who feels it, and when
About 1 in 4 customers buy power through their utility’s basic service, set in six-month contracts, so any oil-price hit would likely show up in the cycle starting in February. About 1.4 million customers, half the state, are in municipal aggregation plans with 12- to 36-month contracts, which could shield them further.[1]
Last winter, wholesale electricity costs rose 45%, driven by a 31% jump in natural gas prices. On Beacon Hill, an energy affordability bill remains stuck in conference committee, where the House voted to cut $1 billion from Mass Save and the Senate did not.[1]
Related: New England governors’ push for heating aid. More Boston business news and the latest Boston local news.
Sources
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