Electric customers are going to get jolted with another rate increase after the Electric Light Department last night told selectmen it is being hit with an unexpected transmission charge from regional grid operators totaling roughly $90,000 a month.
In order to cover the costs of the charge, Light Department Superintendent Malcolm McDonald said rates have to be increased, and the average homeowner will see a $1.50 spike per month, raising the average residential bill to $63.74 a month.
The increase, which McDonald said was completely unexpected and is being levied across New England, is non negotiable.
"There's really nothing we can do about it," said McDonald, who said the increased transmission costs equate to approximately $1 million a year.
The latest increase comes on the heals of the Electric Light Commissioners in July increasing rates by 12.4 percent, or $6.88 a month for the average user.
McDonald said the new increase could fluctuate throughout the year and the rates will be adjusted automatically if it changes.
"We don't have a good idea right now whether this is going to go up or down," said McDonald, who said this is the first time in many years that transmission fees from the local grid operator, ISO New England, have been increased.
Selectwoman Helen Donohue asked whether there was any other way to cover the costs of the charge.
"Is there any wiggle room here or ways to offset this?"asked Donohue.
McDonald said the department does have a Rate Shock Fund, which was established three years ago to begin building up money to ease the blow on ratepayers when the town's current wholesale electricity contract expires at the end of this year.
Light Department officials are anticipating the cost of wholesale electricity will increase next year from roughly 4 cents a kilowatt-hour to approximately 11 cents a kilowatt-hour. Rather than push the entire increase on ratepayers, light commissioners established a shock fund to help cushion the blow.
McDonald said the fund will have approximately $11 million in it by the end of the year, which could be used, but he said that would only mean larger rate increases next year.
"You'd just be putting off the increase until tomorrow," said McDonald.
"This is a small bump," said Chairman Mike Lyons. "A much bigger one is coming (when the town's current contract expires)."
Selectman Jerry Kelleher said the rate shock fund will prove to be valuable and shouldn't be raided now.
"We tried to be proactive and strategic so we wouldn't have a big shock (starting next year)," said Kelleher. "But now I guess we're getting a lot of little zaps."
Daily News staff writer Brian Falla can be reached at 781-433-8339 or bfalla@cnc.com
