One of our members sent this to me and I thought I’d share it with everyone else. It is an article October 6th Boston Globe.
Time to switch?
In a market where homeowners have few options, Dominion aims to lure power customers with introductory rates 20% less than NStar’sBy Bruce Mohl, Globe Staff | October 6, 2006
In one of its biggest pushes to sign up Massachusetts homeowners, Dominion Energy is trying to snap up electricity customers in the Boston area with teaser rates that are 20 percent less than what NStar is offering.
The Virginia utility has sent out 1 million letters to residents of Greater Boston and Cape Cod, offering the attractive deal to the first 25,000 who sign up. The Dominion price, however, is good only through December; after that, it’s likely to change.
Competition among power suppliers has been fairly intense for large industrial and commercial companies since Massachusetts began deregulating the electricity business in 1998. The change let customers buy power from whomever they wanted, and forced utilities to sell off their power plants and become strictly transmission and distribution companies.
But homeowners have had few, if any, options that offer any savings. Most homeowners have continued to buy power purchased on their behalf in six-month increments by their utility from various power suppliers.
Dominion over the past week blanketed the Boston area with letters offering a rate of 9.15 cents per kilowatt hour, nearly 2.3 cents less than the 11.44-cent rate being charged by NStar. For a typical customer using 500 kilowatt hours a month, the difference is $11.45.
Consumers who switch to a new power supplier don’t need to do anything beyond signing on with the new supplier; no wiring changes are needed.
Customers still receive only one bill from their local distribution company, in this case NStar.
Switching to Dominion may not be the best deal for everyone. Mary Horn of Weston jumped from NStar to Dominion in May, and ended up receiving a retroactive bill from NStar for the first five months of the year because she left NStar in the middle of a six-month billing period.
Under state regulations, anyone dropping their utility’s flat-rate basic service in the middle of a six-month billing period is automatically rebilled for the electricity already used during the period at a month-to-month variable rate. In Horn’s case, the variable rate charges ended up being higher than the flat rate charges, and she was billed for the
$48 difference.
Neither NStar nor Dominion told her about the retroactive billing when she signed on with Dominion. NStar says it couldn’t say anything because state law bars it from influencing the decision of a customer considering a new power supplier. A Dominion spokesman said this was the first he’d ever heard of the problem.
“Consumers should know about this before they switch,” Horn said. “I think the whole thing is a mess.”
Someone switching now would be rebilled by NStar for July, August, and September at the company’s variable rate for those months. An NStar spokeswoman said the company’s variable price in the Boston area was 11.89 cents in July, 11.9 cents in August, and 10.5 cents in September.
The NStar spokeswoman noted a customer’s bill could actually go down in some cases by shifting to a variable rate if the variable rate was lower than the company’s fixed rate. Actual costs would depend on electricity usage.
Dominion, which owns two power plants in Massachusetts, one in Rhode Island, and a nuclear plant in Connecticut, has been selling electricity in Massachusetts since 2001. It is the biggest competitive supplier in Massachusetts, with 40,000 customers.
Dan Donovan , a spokesman for Dominion, said his company is making a similar offer of 20 percent off to residents of Cape Cod.
Unlike past Dominion offers, which locked customers in to a fixed rate for a
one- or two-year period, this one is open-ended, allowing a customer to cancel service at any time, with no penalty.
Donovan said customers will receive a new offer for next year in December, at which time they can decide whether they want to remain with the company or switch back to NStar. He said the offer for 2007 will probably require a long-term commitment.
“We’re pretty confident we’ll be able to beat the utility price next year,”
he said.
Bruce Mohl can be reached at mohl@globe.com.
