Eversource is warning customers that high natural gas prices will lead to significantly higher bills for both gas and electric customers this winter – about $30 a month for typical residential gas customers and $20 to $25 a month for residential electric customers.
On the company’s third-quarter earnings call Wednesday morning, Eversource CFO Phil Lembo said the company expects the supply portion of its customers’ natural gas bills to be about 20 percent higher than last year – when Lembo said prices were “extremely low.”
Overall, Lembo said Eversource expects its customers’ natural gas heating bills will increase about 14 percent compared to last year – about $30 a month for the average residential customer. The supply cost on a customer’s gas bill changes month-to-month based on a forecast of what the company will pay to buy its supply of gas that month.
“Unfortunately, we expect the cost of gas to continue to rise, and customers should prepare accordingly,” Eversource spokesman Mitch Gross said.
While the supply price will increase, the amount of gas a customer uses is also a major factor in their bill, and mild fall weather has meant low usage so far. Still, Lembo acknowledged a harsh December or January could cause customers to use more gas, and recommended that they look into the company’s energy efficiency programs to help lower their bills – including its heating cost calculator, borrowing a Kill-A-Watt energy meter from a local library, or signing up for a home energy audit.
“While a 15 percent increase is significant, it is far less than the more than 30 percent increase that propane heating customers are facing, and the nearly 60 percent increase for home heating oil,” Lembo said.
Lembo said the impact of high natural gas prices would be even more pronounced on electric bills. Residential customers typically see an increase to their supply charge of 1.5 to 2 cents per kilowatt hour [$10.50 to $14 a month for the average customer, or about 15 percent] in January, Lembo said, which usually goes back down in the summer.
This year, Lembo said, customers in Connecticut and Massachusetts should expect an additional 2-3 cent increase as the rising cost of natural gas affects the price of electricity in New England – of which about 70 percent comes from natural gas-fired power plants. That will mean an additional $20 to $25 a month increase for the typical residential customer using 700 kilowatt hours a month.
After years of low prices – including historically low prices in 2020 – the price of natural gas has spiked worldwide as supply has been slow to catch up to rising demand. The price of natural gas more than doubled between August 2020 and August 2021, causing average wholesale electric prices in New England to double as a result, according to the regional grid operator ISO New England.
Lembo noted that the supply cost of electricity and natural gas are “pass through” costs for the company, meaning the company has to charge customers the price it paid for the supply, and is not allowed to earn a profit on that.
Lembo said he was confident that Eversource has enough natural gas supplies, noting the company has significant reserves in Waterbury and in two locations in Massachusetts.
“From a reliability standpoint, we consider ourselves very well-prepared for the winter,” Lembo said.