Lazy,  hazy days mean higher electricty rates

By Michael Levensohn -  The Times Herald-Record - 7-01-01

Residential  electric customers of Orange and Rockland Utilities can expect their July bills to come in about 20 percent higher than last July's.

 O&R has set its market supply charge â€`` the price it charges customers for power - at 12.4 cents  per kilowatt hour for July. That's about 36 percent higher than last July, when the price was 9.1 cents. The other portion of an O&R bill, delivery cost, is fixed and has a stabilizing effect on the overall bill.

A typical  residential customer who uses 500 kwh of power in July would see about a $16  increase in the electric bill.

O&R spokesman Michael Donovan said the increase is a function of the slim margins between supply and demand on New York's deregulated power market. O&R simply passes along to customers the price it pays for power.

"As the demand increases, so do the prices,  because the supply becomes scarcer," Donovan said. "This is the best argument going for more generation to be built. This is a market price signal."

As is generally the case with other New York utilities, O&R has sold its plants and no longer owns generating capacity. O&R buys about half of its power on  the open market; the rest is purchased through contracts with suppliers.

Customers of other mid-Hudson utilities have been shielded from  rising market prices because those companies aren't as dependent on the state's  volatile power market.

New York State Electric & Gas' residential rates, which include both supply and delivery, are frozen at about 13 cents per kwh. That's slightly more than O&R customers will pay for supply alone in July.

Central Hudson Gas & Electric's residential customers are paying about 10.6 cents per kwh for supply and delivery through mid-June. The supply portion of the bill works out to just 4.5 cents per kwh - less than half O&R's price for power.

Donovan pointed out that O&R's customers can help offset the increased price of power by switching to an alternate supplier. O&R's Switch and Save program offers a 7 percent discount on power  for two months, plus a $25 rebate, to customers who switch suppliers. With prices higher during summer months, the 7 percent discount makes more of a  difference now, he said.

"Switch and Save is the way to go here to take some of the sting out of high summer bills," Donovan said.