A Connecticut energy marketing company took over service for about
650,000 Boston Edison customers, who aren’t quite ready to begin
shopping for their own electricity supplier, on the first of this month.
After completing a competitive bid process, Boston Edison Co. awarded
its standard offer service contract to Select Energy, Inc., which is a
subsidiary of Northeast Utilities System. Northeast Utilities is a
regulated utility company that serves about 1.7 million customers in
Connecticut, New Hampshire and western Massachusetts. It is the parent
company of Public Service Co. of New Hampshire.
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The arrangement calls for Select Energy to provide an aggregate load
of about 3,000 megawatts, or million watts, of energy to Boston Edison
customers over a 13-month period, according to a statement released by
the Berlin, Conn.-based company.
Edison sold its power plants to Sithe Energies last year.
“Winning the right to supply Boston Edison’s standard offer service
is the most visible success to date in NU’s two-part strategy for
success in the competitive energy marketplace,” said Michael G. Morris,
NU’s president, chairman and chief executive officer. “We intend to be a
major competitive power marketer and energy trader in the Northeast,
while remaining a significant regulated energy delivery company in New
England.”
In November, Select Energy won a three-year, $17 million power
contract to supply energy to about 60 Shaw’s Supermarkets in
Massachusetts and Rhode Island, according to Select Energy. Such deals
are the result of efforts to deregulate New England’s electric industry,
which is gradually expected to reduce the region’s traditionally high
energy prices. Laws passed in the last few years in Rhode Island,
Massachusetts and Connecticut will eventually make it possible for
customers to shop for the lowest price for power generation; although
the same utilities will still deliver that power to residential and
commercial customers.
Until competition is in full gear, electric utilities must offer
customers a backup rate called the standard offer. The standard offer is
designed to increase each year, until all customers are taking advantage
of the competitive market.
In Rhode Island, the state’s three regulated utility companies put
standard offer service up for competitive bid last year, which was
required by law. But officials from those companies — Narragansett
Electric Co., Newport Electric Corp., and Blackstone Valley Electric Co.
— reported they received very few bids, and the ones they did receive
were too high to lower customers’ bills.
Since Narragansett’s parent company, New England Electric System,
sold its power plants earlier this year its customers are being supplied
by the new owner, U.S. Generating. Narragansett customers will pay a
standard offer rate of 3.5 cents in 1999.
Newport and Blackstone Valley are both owned by Eastern Utilities
Associates. So customers of those two companies are still buying
electricity from EUA’s subsidiary, Montaup Electric. The Rhode Island
Public Utilities Commission was still considering EUA’s standard offer
proposal for 1999 after a public hearing on Dec. 7.
EUA wants to increase its standard offer rate from 3.2 cents a
kilowatt hour over the past year to 3.5 cents in 1999. If the PUC
approves the request, the bill of the average residential BVE customer
could increase by about $1.49 a month and Newport customers could see an
increase of $1.63 per billing period, according to EUA officials.
