GMP keeps prices down despite cost drivers
To the Editor:
In a recent commentary [Electricity cost, carbon, supply challenges, 1/10/2014] Guy Page predicts rising electricity costs brought about by rising natural gas prices, the closing of Vermont Yankee and the development of local renewable generation.
Mr. Page's concerns are legitimate, but they can be managed. At Green Mountain Power, after accounting for all these forces, we are asking for no rate increase for 2015.
We're accomplishing this through the management of a balanced portfolio that includes a mix of fuels and technologies, and a mix of contracts that range from a few years to 20 years in length, and ownership of generation when that makes financial sense.
While gas prices are going up and driving electric costs in New England higher, GMP has secured long term stably priced contracts, including Hydro Quebec and Sea Brook nuclear power plant in New Hampshire. These long term contracts protect our customers from the volatility of the New England Market.
Also contributing to price stability are the 32 hydroelectric facilities, two wind plants, and several solar farms we own. Utility owned renewable generation has financial benefits to customers - namely the fuel source is free, the cost of the plant decreases over time, and the ability to sell the renewable energy credits, as well as any federal tax credits received goes to lower the cost of the power to our customers.
As for net metering, while the growth in net metered systems has seen a 30% increase for each of the past two years it represents about one-half of a percent of the amount of power in our portfolio. The price implications, if any are negligible.
The energy sector is very dynamic - prices, technology, state regulations are in constant state of change. It's the utilities responsibility to manage this change in a way that is most beneficial to its customers. Keeping rates flat for two years, as GMP is doing, should give comfort to our customers, despite all the price drivers that Mr. Page references.