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Electric utility seeks rate hike as generating costs go higher.

Byline: Bob Kievra

WESTBORO - National Grid, the state's largest electric utility, yesterday sought approval for a rate hike that would boost monthly bills by 4.4 percent, citing wholesale price increases and regulations designed to add more power plants in New England.

If approved, the average monthly bill for a customer using 500 kilowatt-hours of electricity would rise $3.52, from $79.45 to $82.97.

The rate increase pertains solely to the supply charge of a customer's monthly bill and the utility does not profit from the proposed rate hike. State regulators have little leeway in curbing price hikes associated solely to increased wholesale costs.

National Grid, which has 1.2 million electric customers, said the chief fuel used to make most electricity in the region - natural gas - has risen in price since the utility last reset prices six months ago.

"Gas prices are slightly higher now than six months ago,'' said National Grid spokeswoman Deborah M. Drew.

If adopted by the state Department of Public Utilities, the power supply portion of electric bills would increase from the current summer rate of 10.215 cents per kilowatt-hour to 10.919 cents per kilowatt-hour. The rates would be in effect for the six-month period starting Nov. 1. For the same period last year, National Grid charged 11.672 cents per kilowatt-hour.

The increase is also related to costs associated with an auction system implemented last year that is designed to encourage the construction of new generating plants, National Grid officials said.

The auction, approved by the Federal Energy Regulatory Commission and supported by National Grid, has been estimated at costing electric customers in New England $5 billion in so-called transition payments to power companies. Some of those opposed to the auction had suggested it would boost electricity rates an average of 12 percent, or an additional $5 a month for an average household bill.
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Title Annotation:BUSINESS
Publication:Telegram & Gazette (Worcester, MA)
Date:Sep 19, 2007
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