New England: 12% hike in power rates over 4 years

[midnight armadillo]

Industry plan would raise power rates 12%

Increase is intended as incentive to spur plant construction

By Peter J. Howe, Globe Staff | March 7, 2006

New Englanders would face electric bill increases of 12 percent for the next four years, and undetermined increases after that, under a plan endorsed late yesterday to promote construction of power plants, officials said.

A hearing officer working for the Federal Energy Regulatory Commission unveiled details of a new industry consensus plan that is likely to be adopted by the commission this spring. The proposal is intended to end years of wrangling among energy companies, utilities, and government regulators over how to generate enough electricity.

Over the next four years, the deal would impose $5 billion in added charges on New England homeowners and businesses, a roughly 12 percent premium, according to regional power grid officials. After that, the plan could continue to add undetermined billions every year to New England electric bills, which are already the country's highest.

The higher payments are intended to strengthen economic incentives for companies to build or expand power plants by 2010, but don't guarantee new construction. Deregulation spawned a glut of power-plant construction in the late 1990s and early 2000s, and the overcapacity drove many plant owners into bankruptcy. Virtually no new power plants are proposed to come on line by decade's end.

http://www.boston.com/business/articles/2006/03/07/industry_plan_would_raise_power_rates_12?mode=PF

[danalytical]

1. Rates in CT already rose by 70% in the last three years

22% early last year, and then another 10% or so by the end of the year. It's ridiculous. My pay didn't go up 70% in the last three years.

[MindPilot]

2. Sorry, I can't feel much symapthy for 12%

A few years ago ours went up 300% overnight!

[midnight armadillo]

3. That was temporary

12% is permanent! NStar already raised our electric rates in eastern MA by something like 6.5% this year.