Have you noticed that your Massachusetts electricity bill seems ridiculously high compared to last year? That’s because rates are on the rise. If you look at the Average Retail Price of Electricity report as recorded by the U.S. Energy Administration, the average residential cost of electricity in Massachusetts was $0.1519/kWH in December 2012 and it was $0.2014/kWH in December 2013. That is a whopping 32.6% hike in Bay State electricity prices!
Since we get to see countless electric bills over the course of a year, I decided to start documenting 2014 rates among the electricity suppliers. Unitil customers pay one of the highest rates in the state at $0.196/kWh. NSTAR and National Grid customers in Central and Eastern Massachusetts aren’t too behind at $0.194/kWh and $0.175/kWh, respectively. Cape Cod NSTAR customers pay among the top rates, although I don’t have a recent price to report, while Taunton Municipal Light Plant and Ipswich Utilities had the lowest rates recorded at less than $0.14/kWH. In our small sample set, customers who chose a competitive supplier, such as Dominion Energy, over one of the investor-owned utilities weren’t paying reduced rates.
We can attribute Massachusetts soaring rates to its reliance on natural gas for electricity generation. Only Hawaii ($0.366/kWH) and Rhode Island ($0.206/kWH) residents pay heftier figures. Natural gas rates have gone through the roof because of colder than expected winter temperatures and pipeline capacity constraints. The big utilities are supporting proposals to develop pipeline capacity and have urged residents to consider energy efficiency measures to bring their costs down.
To all Massachusetts families, energy efficiency is a great first step. You can see even bigger savings by investing in solar power. How would you like to locked-in electricity rate under $0.10/kWh over a 30 year period? This won’t happen with a lease or PPA, but it’s possible if you have a good site for solar with a $0 down solar loan. Residents can insulate themselves from future spikes andincrease their home’s value by installing a solar PV system.
Let’s run through a quick scenario on electricity rates. If energy prices increase 5% annually which is realistic, given our state’s reliance on natural gas, a $100 electric bill would be $339 electric bill in 25 years. That would be more than 3 times your current obligation. Wouldn’t you rather pay $85 a month for the same electricity over a 25 year period? If you go solar, you would be your own utility for the most part and your family could keep all of that extra money in your savings account.