Seven scary things to know about your February electric bill

This chart shows the monthly wholesale power price in Central New York since Jan. 1, as compiled by BlueRock Energy, an energy services company. (Courtesy of BlueRock Energy)

By Tim Knauss
on February 16, 2014 at 7:45 AM

SYRACUSE, N.Y. -- This would be a good month to remember to shut off the lights when you leave a room. Electricity prices have tripled in the past two months.

How that will affect your monthly utility bill depends on who you buy electricity from. But the effect won't be good.

Here's what you should know:

1. The monthly wholesale price of electricity in Central New York was 16 cents per kilowatt-hour as of Wednesday, according to National Grid and BlueRock Energy, an independent energy services company. That price is roughly double what power cost a month ago and three times the price in mid-December.

2. Higher wholesale prices are going to translate into higher utility bills
. For a typical household using 600 to 700 kilowatt-hours per month, the higher price could add as much as $50 to $60 to your February bill, if you buy from an independent energy supplier that uses variable market prices. Utilities are reporting smaller increases. (It's complicated for National Grid customers -- more on that below.)

3. National Grid took the unprecedented ste
p this month of freezing its electricity supply price at January's level for residential and small commercial customers. In Central New York, the utility's supply price will net out to about 7 cents per KWH, after factoring in a special, one-time credit of 3 cents per KWH. (The company this month also will give customers a discount of roughly 1.8 cents per KWH to reconcile overcharges from previous months.)

Customers will repay the 3-cent credit (about $20 for a typical household) in future months. So Grid customers will pay the higher power prices eventually, but can spread the pain over several months.

National Grid and state regulators are still working out the details of how the credited amount will be recovered. Also, if the utility discovers next month that it forecasted the February supply price too low at 12 cents, it can recover additional amounts on future bills.

Roughly four out of five residential customers of National Grid buy their electric supply from the utility. The other 19 percent buy from independent suppliers, who are not affected by the utility's price freeze.

4. Residential customers in Auburn and other areas served by New York State Electric & Gas should expect to pay about 8.7 percent more this month than they paid in December. That's an extra $6.25 for households using 600 kilowatt-hours a month. NYSEG's residential supply price is partially hedged against market fluctuations, spokesman Clayton Ellis said.

5. Businesses and institutions are cringing at their recent bills, experts say. Energy consultant Jim Gladziszewski said one of his clients who owns an apartment complex saw his most recent monthly bill rise from $20,000 to $32,000. Phil VanHorne, president of BlueRock Energy, said one of his customers, a restaurant owner, increased his menu prices this month to cover the electric bill.

6. If you heat with electricity, this will be a tough month. About 14 percent of households in Onondaga County - one in seven -- heat with electric power, according to the Census Bureau. Cold weather means residents will use more energy for heat just as prices are peaking.

7. Why are power prices spiking? It's a matter of supply and demand, strongly influenced by the weather, according to experts at the New York Independent System Operator. Power prices are rising in tandem with the spiking price of natural gas, which is in high demand as a heating fuel as well as a generating fuel because of the long spate of cold weather. Gas prices are especially high Downstate, where gas transmission lines are overloaded.

The price of electricity in New York state's wholesale market is set by the most expensive power plant needed to meet demand. At periods of high demand, such as this winter, the price-setting generator is usually a high-cost power plant that burns natural gas. Electric price spikes in February are becoming the norm, said Ken Klapp, speaking for the ISO.

The good news? Experts predict that electric prices will return to normal after the weather eases and the demand for natural gas subsides.

Ironically, natural gas rates in Central New York remain relatively low. National Grid's supply price for residential customers is 47 cents per therm in February, up just 6 cents from January. The price this month is 15 percent lower than the price in February 2013.

Much of National Grid's winter gas supply is purchased in advance of the heating season, and the company takes steps to hedge against price spikes. ty_prices.html