Eversource Electric Rate Decreases
Good news is coming to Eversource customers this summer. Starting on July 1, the default service rate falls 22% from 9.414¢ per kWh to 7.375¢. Assuming Connecticut electricity customers consume about 724 kWh per month, that means customers on Eversource’s Standard Service will see a reduced generation charge of about $53.40 per month.
Unfortunately, smart CT electricity shoppers shouldn’t kick back and relax because they’ve found a sure-thing. Quite the opposite. Because current energy pricing reflects larger economic trends, the one thing you can be certain about this summer is more uncertainty.
The State of Natural Gas
Last winter, Connecticut and many states across the country, experienced a relatively mild winter. Mild temperatures decreased demand on heating. Since most natural gas in the U.S. is used for heating, the slumping demand led to a surplus of natural gas supply. As a result, the low demand and high supply now means that the country is practically swimming in natural gas. And because nearly half of Connecticut’s electricity comes from natural gas generators, cheap natural gas has led to cheaper electricity rates.
To be sure, business shut-downs from Covid-19 have impacted demand for natural gas and electricity even more. According to EIA data, the price for natural gas at New England’s Algonquin Citygate went from $2.15 mmBTU in January to $1.43 per mmBTU on May 20, 2020. Meanwhile, New England daily electricity demand dropped from 305,700 MWh on January 1, 2020 to 246,678 MWh on May 20.
In order to stay afloat, many U.S. natural gas producers are cutting back on production. The number of natural gas rigs in the U.S. is down by 56% from last year to just 80. So while there’s practically a lake of natural gas right now, it’s going to drain away sometime. Exactly when is uncertain. How long CT electricity supplier rates stay low is also uncertain.
Uncertain CT Electric Rates Ahead
Though Covid-19 has kept everyone home these past months, the increased residential usage hasn’t been enough to budge prices that much. That’s especially noteworthy given the summer cooling season is just getting started. NOAA predicts Connecticut and the rest of the east coast can expect higher than average temperatures of the next three months. NOAA’s outlook also predicts a higher than average precipitation. Combined with higher than average temperatures, hot, humid weather could cause higher than normal demand for cooling.
As businesses in the commercial and industrial sectors reopen, higher electricity demand will begin draining the current natural gas surplus. But just when the burn-down for electricity could all happen and how fast remains uncertain.
CT Electric Rates Winter 2020
So don’t take it easy! There’s a lot of uncertainty ahead for CT electricity rates this winter. The one sure thing is it’s very likely that CT electricity rates will begin increasing sometime later this summer. As natural gas stores fall towards an average level by December, electricity prices will likely have risen even higher.
Yet, while Eversource’s planned July rate decrease is great for CT Standard Service customers that only applies until December. By January, Eversource may need to increase the standard service rate and their electricity customers might see a lack of options.
Don’t get trapped. Savvy CT electric customers compare and shop for the best long term electricity plans right now. By shopping and comparing the low price plans at www.ctenergyratings.com, customers can lock in the best low rate for their needs for the next 12 months or even longer. Not only will you save money over the long haul, but you’ll also shield yourself from possible Eversource rate increases and winter’s price spikes.