Brace for electricity rate increases
Higher “capacity” prices are likely to push retail electricity rates upward starting in July, the Office of Consumer Counsel said this week.
Rate increases could continue for the next two years, before starting to subside in mid-2019, OCC said.
New England’s grid operator, ISO-New England, pays power plants that promise to be available to provide power in the future.
Those capacity payments – set through competitive auctions held by ISO-NE each February – are a way to ensure the grid will be able to meet future electric demand from consumers and businesses.
Capacity prices are a component of the generation charge on ratepayer bills. But OCC said capacity currently accounts for 7 percent, or $10, of the average residential ratepayer’s bill, which it estimates will climb to 15 percent come July, when new standard service rates take effect.