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MBTA feels heat of hefty electric bill

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November 5, 2007

The monthly heating bill at your household might not seem so high if you open your mail next to Dan Grabauskas. The general manager of the MBTA pays $25 million a year (of your money) to power the subways, heat the trains, and keep the lights on at platforms and stations. He is about to get an unprecedented expense hike - another $17 million a year.

"I buy wholesale. You buy retail," Grabauskas said. That helps, but not enough to shield the state's biggest utility customer from a pricey market. The Massachusetts Bay Transportation Authority board agreed Thursday to a new five-year deal with Florida Power & Light, replacing a contract with Duke Energy that expires Feb. 1.

The MBTA runs an annual deficit that could surpass $400 million in the next five years, but Grabauskas said the authority has prepared for the upcoming $42 million power bill, because Hurricane Katrina spiked the energy market two years ago.

The old contract locked the T into a bargain rate of about 5 cents per kilowatt-hour. The new variable-rate contract will start at more than 8 cents per hour, still 2 or 3 cents less than the going industrial rate, consultant Mayhew Seavey told board members Thursday. "You are a big customer and a very attractive customer," Seavey said.

NOAH BIERMAN

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