) unit NSTAR plans to provide natural gas in cheapest rate to its
customers. The company has already filed its new supply rate
request to the Massachusetts Department of Public Utilities. If
approved by the concerned authority, the consumers will be paying
lowest natural gas price since 2002 and the revised rate will be
applicable from November 1, 2012.
Per the rate revision appeal, the natural gas rate will decrease by
18% year over year to 57.32 cents per therm from 70 cents per
therm. Apart from normal heating purposes, the people of the region
use natural gas for cooking and water-heating. NSTAR customers
normally use an average of 131 therms of gas per month between
November and May.
This new rate is expected to save over $15.00 per heating
customer a month compared with last year. The customers will pay a
monthly natural gas bill of $145.60 compared with $161.25 a year
Northeast always tries to provide uninterrupted utility services to
its customers with much lower prices than its peers. In May this
year, the company had filed for reducing electricity supply rates
for its residential customers to their lowest levels in 8
Per the filing, the new rate would be 16% less than the current
rate of 7.928 cents per kilowatt-hour, resulting in a rate of 6.699
cents per kilowatt-hour. If approved, these new rates would be
applicable from December 2012.
We believe this natural gas rate revision strategy is a good move
for the company to tap more industrial as well as residential
customers. We expect natural gas to gradually replace other natural
resources like coal, oil and renewable energy for power generation
purposes in the future. This rate revision will enable Northeast to
expand its industrial client coverage, mainly the electricity
The lower natural gas pricing is expected to attract higher number
of clients, which will subsequently enable the company to balance
its overall revenue numbers. We appreciate Northeast's this "less
pricing, more customers" strategy.
Hartford, Connecticut-based Northeast Utilities is a public utility
holding company, which provides energy delivery services to
residential, commercial and industrial customers in Connecticut,
New Hampshire, as well as Massachusetts. The company engages in the
purchase, delivery, and sale of electricity. The company's closest
peer is Indiana-based
). Northeast Utilities currently retains a Zacks #3 Rank
(short-term Hold rating).
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