Dominion Retail competes for Vineyard energy customers; offers cent or two less

By Janet Hefler - April 6, 2006

Dominion Retail, a subsidiary of a Virginia-based energy company, targeted Vineyard and Cape Cod electric customers with a promotional mailing last week that offered reduced rates of 10.9 cents per kilowatt-hour through December.

"I can't tell you the number of calls I've gotten," said Kate Warner, director of the Vineyard Energy Project. "The basic thing is people need to be very careful. They need to read carefully what they are signing and what the parameters are. Frankly, we're talking pennies here and there. The Dominion offer may save $6 a month for the average Vineyard family of four."

Dominion Retail's offer, available with an individual customer code, is limited to the first 7,500 respondents on the Cape and Vineyard and ends on April 17.

Its parent company, Dominion, purchased three power stations in Massachusetts and Rhode Island in January. The energy company advertises itself as one of the nation's largest producers of natural gas and electric power.

Dominion Retail already supplies electricity to nearly 15,000 Massachusetts customers who previously bought power from Massachusetts Electric, Western Massachusetts, and the three NSTAR utilities, Boston Edison, Commonwealth Edison and Cambridge Electric.

Most Vineyard residents are members of Cape Light Compact (CLC) and currently receive their energy supply through ConEdison Solutions at 12.91 cents per kilowatt-hour, a rate which is guaranteed through December. Customers who opted out of CLC for NSTAR as their supplier will pay 11.2 cents per kilowatt-hour through the end of June.

CLC is a municipal buying group of 21 Cape and Island towns formed to negotiate the best electric rates in a deregulated market. The compact purchased its current power supply contract from ConEdison Solutions shortly after Hurricane Katrina disrupted the oil and natural gas supply used to fuel many power plants in New England.

At that time CLC officials said they locked in the best competitive prices possible through the end of the year. NSTAR's energy supply rates, though lower, are good through June.

Recently CLC took advantage of fluctuations in the current energy markets to reduce municipal rates. The compact announced this week that it intends to initiate a lower rate for residential customers during the time period covered by the Dominion contract.

Although Dominion Retail offers Vineyard and Cape Cod consumers a third choice for their energy supply, as with the CLC power supply, the price does not include the distribution, transmission, and other charges imposed by NSTAR, currently at about 8.5 cents per kilowatt-hour.

Page one on monthly electric bills, which come from NSTAR, reflects NSTAR's charges for energy transmission and distribution, while the energy supplier and number of kilowatt-hours used are listed on page two.

In weighing the three energy suppliers' competitive rates, contract terms are an important factor, Ms. Warner said. Dominion Retail's contract offer would begin in the next 30 to 45 days, depending on the customer's next scheduled meter reading date, and ends with the December 2006 reading.

Once service begins, customers must provide written notice 30 days in advance and pay a $50 cancellation fee to terminate the contract before the end of December. NSTAR requires no contract, and no advance notice or fee to exit. While there is no advance notice or fee charged to customers who opt out of CLC, they may not be able to get back in later, because the electric supply is linked to a base number of customers.

Dominion's contract also contains an "Evergreen" clause, which means those who sign up remain Dominion customers after the initial term unless they take specific action to cancel their contract.

All three energy suppliers face uncertainties about rates due to the volatile energy supply market. Dominion Retail states if the fixed price is not adjusted after the promotional offer's initial contract term expires, then the price charged will be variable, adjusted monthly based on prevailing market conditions.

CLC's rates are capped through December and may drop. NSTAR's rates are set through July 1, so consumers considering a switch may want to wait until rates for the second half of the year are announced later this spring.

"I would stick with the compact," Ms. Warner said. "Before Cape Light Compact came on the scene, we didn't get the services we do now. We have the green power program, the compact provides free energy audits and helps us to teach about energy in schools, plus every Island town is getting a solar electric system for free. I think we have got to take the broader view, recognizing that fuel is in a volatile place."

A state government web site provides information about electric rates at www.state.ma.us/thepower. The Cape & Islands Energy Information Clearinghouse offers a chart comparing options, costs and tradeoffs between power supply choices on its web site at www.cirenew.info/powerSupplyTips.htm.