A new report explains how spikes in the price of fossil gas are the cause of the dramatic rise in electricity rates for New England customers. Fossil-Fueled Rates: How Gas Costs are Causing New England’s Electricity Price Spikes, and How Electrification Will Help Protect Customers in the Future highlights that the recent increase in electricity prices ultimately demonstrate the risks of continuing to depend on volatile commodities like fossil gas.
Authored by Strategen Consulting, Inc. on behalf of Sierra Club, the report illustrates how the electric sector in New England is heavily reliant on gas-fired generation and how those gas commodity costs are quickly passed on to customers in their electricity bills, causing the recent price spikes in the cost of electricity, while gas customers’ heating bills are generally only adjusted to reflect the cost of gas once or twice a year. Gas prices across the country rose around 62% year-over-year at the start of 2022, but the increase was closer to 400% in New England, due to the region’s overreliance on gas for power generation and heating, no regional source for gas, and increased global competition for gas due to Russia’s war in Ukraine.
The report concludes that the most effective way to protect customers from fossil gas-driven price spikes is electrification of home heating and appliances and procuring more wind, solar, and battery storage as sources of power on the grid.