Volatile utility prices expected to rise again

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By Melanie Lekocevic

Capital Region Independent Media

After coming down following a spike in February, utility rates are expected to rise again over the summer, according to Central Hudson. Courtesy of Pexels

In a year filled with rapidly changing energy prices, utility rates are expected to rise over the summer, according to Central Hudson.

The utility provider livestreamed a discussion on social media June 14 outlining the status of electricity and natural gas costs, and said rates, which were lower in June, are expected to rise once again.

The expected increase comes after a highly volatile market that saw utility prices skyrocket in February, and then settle down a couple of months ago.

“Supply prices have come down, I’d say nicely, on electric,” said Anthony Campagiorni, senior vice president of Customer Services and Gas Operations. “We had an all-time high in February at 22 cents and we are down to about 4.18 cents per kilowatt hour right now. If you look back at our past five Junes, that’s at or below the level we’ve been at for the past five years. So I think prices have stabilized.”

Natural gas prices are still “a bit elevated,” Campagiorni said.

“I think they’re about 77 cents per CCF right now, I would say a little higher than they have historically been,” he added.

CCF refers to 100 cubic feet of natural gas.

Rates on both electricity and natural gas are predicted to go up again over the summer.

Prices have been volatile due to a number of factors, Campagiorni said, including geopolitical events such as unrest in Eastern Europe with Russia’s invasion of Ukraine and the impact on energy supply, as well as a colder than usual winter that impacted utility use in February, when rates were at their highest.

With other energy rates rising, including gasoline, electric and natural gas commodities can expect to rise as well in the global marketplace.

The closing of the Indian Point nuclear power plant in Westchester County also impacted energy supply around the state, he said.

“So we’re looking at volatility. We think it may persist for some time,” Campagiorni said. “Although we’re nicely down right now, especially in the electric supply, I think there is a cautionary tale to be careful about future energy increases.”

The Central Hudson utility bill that customers receive is broken into two main components — supply and delivery, Controller Lora Gescheidle said.

“Commodity costs (supply) are set by markets and Central Hudson does not make any profit on this section of the bill,” Gescheidle said. “You have options here — since Year 2000, New York state is deregulated and customers have the option to go out and procure their supply from a lot of different third-party suppliers. Central Hudson will bill on their behalf so it will still be on your Central Hudson bill, but this portion of your bill is really market based.”

When prices are low, the company purchases stockpiles of energy as a hedge against future rising prices to mitigate risk, Campagiorni said.

On the delivery side, customers can expect to also see an increase in the delivery rate on their Central Hudson bill starting July 1. The company is beginning the second year of a three-year rate agreement.

“Come July 1, there will be an increase that was agreed upon for 2%,” Gescheidle said.

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