Jun 18 - McClatchy-Tribune Regional News - Jay Fitzgerald Boston Herald

Massachusetts businesses are getting zapped by skyrocketing electricity prices -- and thousands more will be hit by a 40 percent rate spike in less than two weeks.

The staggering increases are prompting predictions that a few energy-dependent businesses may go under in coming months if the price spikes don't ease soon.

"Some companies may not be around in six months," said Bob Rio, a senior vice president of Associated Industries of Massachusetts, noting that two paper-mill firms in western Massachusetts were shuttered last year due to soaring electricity prices.

Since March alone, wholesale electricity prices have jumped in New England by 42 percent, according to Energy Security Analysis in Wakefield.

The culprit: surging energy prices, especially for natural gas, which is used to power nearly 50 percent of all Massachusetts electric plants.

The increases are already forcing businesses to cut back on electricity use, whether by shutting off air-conditioning or altering production times to take advantage of lower off-peak-hour prices.

"It's a challenge," said Warren Dibble, finance chief for Boston's Harpoon Brewery, which is bracing for a 40 percent increase on July 1, when summer rates kick in.

To save money, Dibble said, Harpoon has joined the region's so-called "demand-response" program that allows firms to buy electricity at cheaper prices if they agree, during emergencies, to shift production to non-peak hours.

Depending on the type of electric contracts companies sign, some of the recent wholesale price spikes have already been passed along to business customers.

Nstar's 3,000 commercial "basic" customers -- or those who don't buy electricity on the spot markets via vendors -- will see rates jump about 40 percent July 1, according to filings.

Nstar's response: Don't blame us.

"We make no profit on the electric side of the bill," said Nstar spokeswoman Caroline Allen, noting that it merely passes along price spikes charged by independent power generators.

Power generators' response: Don't blame us.

Angela O'Connor, president of the New England Power Generators Association, said electric-plant owners are getting socked with higher and higher fuel bills in order run their facilities.

Residential and small-business customers are also getting hit.

Under the state's new deregulated electric system, Nstar's rates for those customers will increase by about 7.1 percent on July 1. National Grid's summer rates have also jumped by about 5.3 percent.

Larger business customers on the so-called "basic" plan pay more.

"It's just taking money right out of the bottom line," said Joe Quattrocchi, owner of Boston's popular Vox Populi restaurant. He estimated his electric bills have increased nearly 50 percent in recent years, to about $6,000 a month.