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What Do I Need To Care About On My Utility Bill? Part 1

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Distribution Rate Class Assignment

Distribution rates are typically updated on a quarterly to annual basis and are subject to approval from the appropriate regulatory authority. Depending on the host utility and their breakout of distribution rates, customers can be assigned to one or more rates based on their historical energy usage characteristics.  These rates usually incorporate various fixed, consumption, and demand charges which allow the utility to recoup costs associated with delivering power to consumers and secure a regulated profit margin.

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Capacity & Demand: Hidden Drivers to Energy Retail Costs

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Long exposure image of a city at dusk.

Everyone knows that energy prices in New England are quite high relative to other regions of the country. That is particularly true in Connecticut, where Artis Energy is based. Even though New England’s wholesale energy markets produce competitive prices that reflect suppliers’ costs, per ISO New England, the fact remains that fuel costs – most particularly natural gas which sets the price for wholesale electricity in our region — as well as the need for new power resources and improved transmission, remain key energy cost drivers. Both electricity and natural gas prices have seen dramatic swings in recent years (e.g., in 2012, natural gas prices hit a 10-year low; in the winter of 2015, the region saw some of its highest wholesale electricity prices since 2003), driven in large measure by an inadequate natural gas delivery infrastructure.

But there are other, less visible costs that can – and do — contribute mightily to higher bills for a range of accounts. These include capacity and demand charges. Let’s take a closer look.
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