Supplies tight, demand high, Holyoke Gas & Electric customers can expect rate increases

HOLYOKE Holyoke Gas and Electric customers can expect higher energy bills in the coming months. In an update to the City Council, the utility cited increased global demand for natural gas and shortages in domestic supply.

Additionally, supply chain disruptions and volatile economic trends are causing the jumps in natural gas and electricity rates. Due to these factors, HG&E customers will see increases in both natural gas and electricity prices for the coming winter, stated James Lavelle, HG&Es general manager.

City Councilor Kevin Jourdain requested HG&E provide a detailed outlook for 2022/2023, which he described as good news/bad news future.

As we approach the winter months, Holyoke Gas & Electric wants to make the community aware of regional concerns regarding energy costs as well as potential impacts to service reliability, Lavelle stated, who reminded customers of available assistance.

Lavelle projects a 32% increase over last winter for residential natural gas consumers, about an $80 monthly increase. In addition, he expects a 10% rise for residential electricity customers over the previous winter based on an average monthly usage of 500 kilowatts.

While HG&E will continue to have some of the lowest rates in the region, inflation and the rising cost of everyday expenses are having a significant impact on our customers, and we are here to help, Lavelle wrote.

He called on customers to take advantage of HG&Es novel energy efficiency and conservation programs, including fuel assistance, discounts, payment plans, and rebates. Customers will receive information in their November statements on available programs.

From a reliability standpoint, HG&E is well prepared for the upcoming winter heating season and has secured the necessary energy supplies while continuously working to mitigate potential impacts on customers, Lavelle added.

The municipal utility uses whats known as an energy procurement hedging strategy for electricity and natural gas, a way to minimize risks. HG&E boasts a diverse energy portfolio, including hydro, solar, and battery storage and long and short-term energy contracts.

As it relates to natural gas supply, HG&E is fortunate to have a portfolio made up of both firm pipeline capacity from the Tennessee Gas Pipeline and liquefied natural gas, which is stored at HG&Es West Holyoke LNG Facility, Lavelle noted.

Lavelle cautioned that interruptions to fuel deliveries (gas or electricity) already purchased pose the most significant risk to customers this winter. Issues with the regional electric grid and pipeline constraints are two major factors.

But actions are being taken at several levels to mitigate this risk. A significant global increase in demand for natural gas, coupled with constrained supplies, has been widely reported, Lavelle stated.

According to Lavelle, natural gas fuels 60% of homes in New England and generates 50% of the electricity used in the region. In addition, ISO New England issued a Problem Statement and Call to Action. Without an adequate regional gas supply, home heating and electricity demand may be affected.

ISO New England has petitioned the Biden administration to take specific actions to alleviate current LNG supply constraints, Lavelle stated. He added that ISO New England coordinates mitigation plans with HG&E and other utility companies.

HG&E has taken all necessary steps to maintain winter reliability in a variety of potential scenarios, Lavelle wrote. HG&E is proud to offer customers highly reliable service and has received national recognition for these efforts.

In an email, Jourdain said he called for the energy update on behalf of Holyoke families worried about prices and energy availability.

The good news is availability should not be an issue, but the bad news is prices are going up considerably, Jourdain said. I have asked HG&E to do whatever they can to help our residents deal with these price hikes by offering payment plans, financial assistance, and other supports.

The councilor continued, HG&E made clear they stand ready to help and encourage residents to reach out. I appreciate their quick response and transparency with what will be happening here in Holyoke and the region this winter.