The year 2001, in terms of energy prices, came in like a lion and went out like a lamb. At the beginning of last year, Rhode Island businesses faced escalating costs for electricity, natural gas, home-heating oil and gasoline. But a sputtering economy has sapped energy demand, helping prices to fall across the board – plummeting in some cases, while only dropping slightly in others. Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,… The most dramatic decrease has been in gasoline prices, which sank from a high of $1.78 for an average gallon of self-serve, regular unleaded last May to $1.12 as of Dec. 24. That most recent price is the lowest in nearly three years, when gas stood at an average of $1.10 in April 1999, according to Rhode Island’s State Energy Office. Home heating-oil prices have slumped so far this winter because of weak demand from lower economic output and mild weather this fall. The average retail price for a gallon of home-heating oil was $1.20 in late December, compared to $1.57 a year earlier. But there were signs in late December that oil prices could be poised to move higher, as officials from OPEC promised to cut oil production. Also, recent weather forecasts for the East Coast portend colder-than-normal weather for January. Crude oil prices on Dec. 26 posted their biggest one-day gain in a year, closing at $21.27 a barrel. A huge spike in wholesale natural-gas prices that began late in 2000 led to sharply higher gas bills for businesses in 2001. Providence Gas and Valley Gas customers paid about 30 percent more for gas in 2001 than in 2000. But that could have been a lot worse, according to Southern Union, which owns both utilities. Although Southern raised its rates about 30 percent last winter, prices on the wholesale level jumped as much as fivefold in late 2000 and early 2001, which meant the utility was charging customers less than it was paying its suppliers. The discrepancy led to $35 million in “underpayments,” which Southern plans to finish collecting by June. The utility did, however, lower rates by 3 to 4 percent on Dec. 15 because natural gas prices have fallen so far. Lofty natural gas prices in early 2001 not only drove up gas bills but also led to a series of increases in electricity rates. Many power plants in New England are fueled by natural gas and increases in wholesale gas prices drive up generation costs. Narragansett Electric’s Standard Offer, which pays for electricity generation, jumped five times between the summer of 2000 and last spring, from 3.8 cents per kilowatt-hour in the summer of 2000 to 6.3 cents in April of 2001. But as the cost of natural gas has fallen, so have Narragansett’s rates. Two reductions in the Standard Offer since October have pushed rates down 20 percent. It now stands at slightly more than 4.6 cents. Rates also have come down for Narragansett Electric’s Last Resort customers, or those businesses that left the utility after deregulation in search of cheaper rates from non-regulated suppliers and have since returned to Narragansett Electric. About 1,000 commercial and industrial users in Rhode Island paid exorbitant Last Resort rates last summer – as much as 10 cents per kilowatt-hour – causing some larger users to leave the utility and sign contracts with non-regulated electricity retailers. But in August, Narragansett lowered the Last Resort rate to 5.67 cents from September to March. Last Resort rates also have been set from March through September of this year, according to Narragansett Electric spokesman Bob Seega. They will increase gradually beginning in April, peaking at about 7.49 cents in August – significantly lower than last summer but still much higher than Narragansett’s Standard Offer rate. While electricity prices have stabilized, the earlier increases were enough to prompt the Rhode Island House of Representatives in May to call for a series of House Corporations Committee hearings to review the utility restructuring act of 1996. The committee during the second half of 2001 heard testimony from big businesses, consumers, private electricity retailers and officials from Narragansett and the Public Utilities Commission. The goal: To figure out why deregulation has thus far failed, and what can be done to make it work.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Sputtering economy saps energy demand
PBN Branded Content
