Unitil discusses rising energy costs at Concord Forum
Unitil Corporation, (Unitil.com), a supplier of natural gas and electricity to New England customers, participated in the Greater Concord Chamber of Commerce’s monthly forum on the factors driving rising energy costs in the region, measures being taken to mitigate the impact, and how customers can prepare for the approach of the winter season.
Unitil Media Relations Manager Alec O’Meara joined a panel of speakers at the September 15 event to explain how gas pipeline constraints are forcing New England to compete on the global market for liquefied natural gas (LNG) shipments, resulting in normal energy supply rates this winter.
“All of the New England states are a collective group when it comes to energy supply and supply, and supply is really the key element driving this increase,” he told the assembled audience. at the Holiday Inn in Concord for the forum.
O’Meara spoke about the challenges of meeting natural gas demand during the winter months, offering insight into how New England’s energy supply used to generate electricity has changed over the past two decades as efforts are made to move away from more emissions-based fuels to a mix of cleaner and more renewable energy sources.
“We’ve phased out coal. We’ve phased out oil, and we’re using more and more natural gas to a point where natural gas is something like 50-53% of our total fuel mix,” O’ said Meara. “In the winter it creates a little bottleneck because we also heat with natural gas in the winter and there is only a limited amount of capacity that can come into New England based on the pipeline infrastructure. existing.”
To supplement natural gas supply, especially during the winter, New England relies on ships to bring LNG from overseas to the region. On peak days in the winter, O’Meara said up to 35% of New England’s natural gas supply arrives on these ships, but the energy crisis in Europe fueled by the Russian invasion of the Ukraine last February resulted in much higher costs. This year. The conflict brought New England into direct competition with Europe.
O’Meara broke down a typical utility bill to highlight the difference between supply and distribution rates. He explained that the distribution rate is the part that covers the cost of supplying electricity from a utility company.
“The distribution part is effectively the utility part. … It’s the people, it’s the buildings, it’s the trucks, it’s the poles, it’s the call center. It’s all you think about when you see your utility around you and it’s all the infrastructure that brings power from where it’s at to your house,” he said.
While the distribution tariff remains fairly stable, the supply tariff is the part of the bill that experiences the most volatility. Unitil, which does not generate its own electricity, must bid every six months for the current New England electricity market rate.
In an effort to partially mitigate the magnitude of any rate increases this winter, regulators in the states of Massachusetts and New Hampshire have approved Unitil’s request to obtain bids on supply rates for a eight-month period instead of the traditional six-month period. This means that Unitil’s winter tariff, which agencies have not yet approved, will be in effect from December 1 to July 31.
During last week’s forum, O’Meara also discussed the proactive steps Unitil has taken to inform customers of rising energy costs and the options available to them to prepare for this winter, including energy efficiency programs, assistance programs and third party energy suppliers.
“We try to serve as an advisor to our clients,” he said. “We recognize that this is a truly unique time in the energy industry.”
Third-party suppliers offer customers the ability to effectively act as their own broker by finding an energy supplier with a supply tariff that would be included in their regular Unitil bill.
“Like any other long-term contract you might sign, it’s very important to know exactly what you’re signing if you’re considering (a third-party provider). You want to know how long that contract will last. You want to understand what happens when it expires, but it’s an option and it’s something that can give you a different opportunity over the next few months,” O’Meara said.
More information on winter energy supply costs and resources available to customers can be found on Unitil.com.