3 electric utilities buck national rate-hike tide
Although consumers nationwide are being zapped this year by an average 6.5 percent increase in the cost of electricity, in at least three areas of the country, electric bills are shrinking:Skip to next paragraph
Subscribe Today to the Monitor
* This month north- and central-California residents will be paying Pacific Gas & Electric 20 to 25 percent less per kilowatt-hour than they did 18 months ago.
* Customers of Atlantic Electric in New Jersey are already being charged 8.7 percent less than last year.
* Residents of Massachusetts, Rhode Island, and New Hampshire have received a 4 percent rate decrease from New England Electric Systems.
The national price increase came in spite of the decline in the prices of oil and coal used to generate the electricity. High interest rates for construction loans and high construction costs for new plants more than offset the advantage.
However, by minimizing construction costs, initiating effective load-management programs, and introducing innovative renewable energy programs, the three utility companies were able to pass on lower fuel costs to consumers.
Ron Ruthkowski, spokesman for Pacific Gas & Electric, attributed the lower costs to the unusually good ''winter snow pack and rains'' contributing more ''free'' hydroelectric power to the energy mix.
PG&E has the most diverse electric generating capacity in the United States, drawing on a total of nine sources, including geothermal, waste heat co-generation, and solar voltaic. After the Diablo nuclear plant and Helms hydro plants come on line, events scheduled for this year, no new conventional energy plants are planned for the next 10 years - only small alternative-energy projects.
Large new plants are not needed now because estimates indicate electricity use will decline. The recession, reduced population growth, and conservation have lowered earlier predictions of 7 percent annual growth down to 3.5 percent.
PG&E has signed contracts with small energy producers that harness winds; co-generation waste heat; and geothermal, solar, and hydro power for a potential total of 1,246 megawatts of electricity - the equivalent of at least two large nuclear power plants - annually. California energy tax credits for small energy producers encourage the growth of this infant industry, the PG&E spokesman said.
In New Jersey, Atlantic Electric's policy of putting off construction costs has held costs down, according to spokesman William Elliot.
Companies like Atlantic Electric that have less financial obligation for plants currently under construction are in better shape than others, according to Kirk Willison, a spokesman for the Edison Electric Institute, a trade association for the industry. With higher construction costs and interest rates forcing higher capital costs in 1980-82, many electric companies were locked into paying much more than anticipated for excess capacity. In the 1960s, each kilowatt hour added by building was less expensive than the previous one; now it is more expensive.
To keep a lid on peak summer demand and thereby avoid the need for new plants , Atlantic has instituted a series of programs, including consumer rebates ranging from $20 to $500 for purchase of energy-efficient air conditioners, solar water heaters, and wind generators. James O'Donnell, spokesman for New England Electric Systems, which serves consumers in Massachusetts, Rhode Island, and New Hampshire, attributes its rate reduction to a 1979 decision to convert six oil-burning plants to coal instead of building a nuclear power plant in Rhode Island. This reduced its energy mix from 78 percent oil in 1979 to 20 percent today and allowed a fuel cost savings of $45 million in 1982.
For example, the Brayton Point plant in Somerset, Mass., is one of the largest coal-conversion projects in the country. The plant replaces 11 million barrels of oil with 2.7 million tons of coal annually.