With the pending supply rate hike and the transmission investment charges, the average Massachusetts electric bill is expected to increase by an average of 11 percent, to nearly $90.
The overall cost of electricity in Massachusetts has been rising steadily over the past decade, although prices dropped for a short period. The cost of natural gas in Massachusetts was up 30% during the decade, and it was up to $63 per month by the end of 2013. Meanwhile, the price of electricity for residential properties jumped by 30 percent over the same period. While this increase was expected to be gradual, the high cost of fuel in Massachusetts is expected to continue.
The recent drop in the price of natural gas is responsible for much of the jump in electricity prices across New England. Nearly half of the region’s electricity is produced by natural gas-fired power plants, and those plants set wholesale prices. In September, wholesale gas prices in Massachusetts were 208 percent higher than they were a year earlier. ISO-New England, the grid operator for the region, said the jump was the result of higher gas demand.
The rise in supply costs has impacted the price of electricity in New England states. While residential electricity bills in New England are largely similar to those in the Southeast, wholesale rates in the New York and Connecticut region continue to increase, with the prices of natural gas consistently rising during the winter.
As a result, the high cost of electricity in Massachusetts will continue to rise. The state’s high costs are due to rising energy prices worldwide. The energy prices in the US are already on a steady upward trajectory. However, there are also other factors that affect electricity costs.
The PUC has estimated that the standard offer rates will increase by about four to six cents per kWh in 2022. But it’s not clear if the PUC’s estimate is correct. A spokesperson for the commission said that they are only speculating and cannot give a final price for energy. But the figures are scary. Moreover, the state is already facing a high cost of electricity, with prices well above historic levels.
