You may have seen the headlines recently warning of massive electricity price spikes this winter, with National Grid announcing a 64% increase in Massachusetts. What you may have missed is the anticipated jump in residential natural gas heating costs as well, an expected 22% hike. Ratepayers in other utility jurisdictions will face similar price increases. Two questions probably jump to mind: 1) why is this happening and 2) what can I do about it?
Why is this happening?
Why prices are spiking so swiftly is a complex question, but the answer to each component comes back to two words: Natural Gas. New England is heavily reliant upon natural gas for both electricity and home heating. About two-thirds of Massachusetts’ in-state generation is natural gas and more than half of homes are heated with the fuel. Over the years, the region has “cleaned up” the grid by replacing generation fed by other fossil fuels like coal and oil with even more natural gas. Given the leakage rates in the natural gas system, it’s debatable how much this has lowered GHG emissions, but the fuel has, at times, been relatively inexpensive. This is no longer the case.
Unfortunately, single-mindedly pursuing natural gas has led to an overdependence on the fuel source. As Acadia Center has previously highlighted, this has left the region vulnerable to price spikes when there are shifts in the commodity markets, which are international and therefore not subject to state regulation or controls. This is exactly what is occurring now. Natural gas prices have risen over the past few years thanks to the global pandemic and climate change disrupting production and causing unexpected shifts in demand. Those issues have continued, but the Russian war against Ukraine has greatly exacerbated the problem. Russia is the world’s largest exporter of natural gas, causing upheaval in the natural gas markets. As a result of Russia’s aggression and global instability, international commodity prices are spiking. This combination of factors has led to massive hikes in prices for both electricity and heating in New England.
Overreliance on a single fuel source, specifically a fossil fuel commodity, is never a wise decision. New England needs to double down on expanding investment into many locally based renewable electricity options, buoyed by a flexible grid and flexible demand to provide ratepayers with safe, reliable, and affordable energy.
What can you do about it?
Given that the underlying problem is structural, there are no easy or instant solutions to address it. But that does not mean that consumers are helpless. New England residents need to contact their legislators, executive branch, and local officials to advocate for long-term solutions, like more investment in demand response, weatherization, other energy efficiency options, and a diversified and decarbonized grid powered by renewable energy. Acadia Center is also advocating for these changes with ISO-NE, the region’s power operator, and state decision-makers.
In the meantime, there are a number of short-term options for consumers heading into this winter that can help blunt the current or upcoming pain in your pocket. Renters should speak with their landlords about these options as well, as some may require authorization from a landlord.
- Shop Around: Cities and towns often run community choice aggregation programs. These programs allow local governments to procure power for constituents, often at lower costs to consumers. Boston, for example, runs a community choice program that provides power to residents at rates that are lower than Eversource’s current rates, and much less than the expected winter rates. It is important to distinguish these from Competitive Electric Supply programs, which are run by private entities. These programs will often actually lead to higher rates for consumers, according to an investigation by the Massachusetts Attorney General, and are not recommended by Acadia Center. If you have questions about community choice aggregation programs, reach out to your local officials or search for state.
- Energy Efficiency Programs: Your state’s energy efficiency programs will often offer low cost or free upgrades for your home such as weatherization, which can save you money from day one. Contact them as soon as possible because there may be a long waitlist! You can find more information for MA, RI, CT, and ME.
- Community Shared Solar Programs: Community shared solar programs allow residents to take advantage of solar power without having solar panels on their own roof. They allow consumers to purchase power from solar farms that are located away from their residence or business. Search for community shared solar programs in your area for more resources, or your state may be able to offer direction.
- Fuel Assistance Programs: The Low Income Home Energy Assistance Program (LIHEAP) is a federally funding program administered by states that provides assistance to low-income households seeking help with their energy bills. Your state may have additional resources as well. You can find more information for MA, RI, CT, and ME.
- Legislative Rate Relief: In addition to contacting your legislators to push for long term solutions, residents should reach out to their legislators to ask for short-term economic relief spending packages to help all residents.
- Utility Payment Plans: Utilities often will work with customers to offer payment plans to help residents struggling to pay their bills. It is important to note that this relief is only temporary, and you will still ultimately owe the full amount of the bill. Some states, like Massachusetts also offer protection from utility shutoffs during the winter. Your utility may have additional programs to help. For example, National Grid has launched this website for Massachusetts residents.
- Local Charities and Programs: Charities near your municipality may offer programs that can provide assistance on your energy bills. Contract your local officials to see if they are aware of these resources.
For more information:
Senior Advocate and Massachusetts Program Director
Phone: 617-742-0054 x106