Six Charges in MA That Make Your Electric Bill More Expensive
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Thursday, January 15, 2015
GoLocal Worcester News Team
This fall,
GoLocal Worcester reported that National Grid warned its customers of a 37 percent increase in electric rates between November 1, 2014 and April 1, 2015.
Marcy Reed, President of National Grid in Massachusetts said, “With the chance of another cold winter on the way, National Grid is very concerned about what higher energy costs mean for our customers. Though we can’t control power supply prices, we can help our customers in other ways, which is why we urge Massachusetts residents to take full advantage of energy efficiency and payment programs that can help lower their bills.”
According to National Grid, "A typical residential basic service customer using 500 kilowatt hours (kWh) per month will see an increase of 37 percent, or about $33, on monthly bills this winter versus the same period last winter. The section of electric bills where customers will see the majority of the difference is called Supply Services. This section of the bill represents the cost of the electricity the company purchases on behalf of customers and passes on without a mark up."
The most expensive charge on an electric bill is the generation charge. The generation charge is "the charge to provide electricity and other services to the customer by a supplier." However, there are six other charges that on your bill that you need to be aware of too.
The majority of these charges are overseen and reviewed each year by the Massachusetts Department of Public Utilities (DPU).
Here Are the Six Charges On Your Electric Bill:
Related Slideshow: Six Charges That Make Your Electric Bill More Expensive
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Transition Charge
Charge: 0.106¢/kWh
Description: Company payments to its wholesale supplier for terminating its wholesale arrangements.
-National Grid Glossary of Terms on Your Bill
The transition rate is a fixed cost associated with the financing that utilities invested in building power-generating facilities (when they had the authority to do so) and the costs associated with divesting themselves of those properties, as required by the 1997 Electric Restructuring Act. These rates enable a utility to recover costs associated with meeting the law's requirements including the divesture of its power-generating facilities. The transition charge is reviewed and reconciled each year by the DPU.
-Mass.gov
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Distribution Charge
Charge: First 600 kWh: 3.701¢/kWh
Excess of 600 kWhh: 4.363¢/kWh
Description: The cost of delivering electricity from the beginning of the Company's distribution system to your premise.
-National Grid Glossary of Terms on Your Bill
Distribution rates are subject to the sole jurisdiction of the Massachusetts Department of Public Utilities (DPU). If an electric distribution company seeks to increase its distribution rate, it must apply to the DPU and subject its costs and revenues to regulatory scrutiny in a rate case.
-Mass.gov
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Customer Charge
Charge: $4.00/month
Description: The cost of providing customer related service such as metering, meter reading and billing. These fixed costs are unaffected by the actual amount of electricity you use.
-National Grid Glossary of Terms on Your Bill
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Renewable Energy Charge
Charge: 0.050¢/kWh
Description: A charge to fund initiatives for communicating the benefits of renewable energy and fostering information, growth, expansion and retention.
-National Grid Glossary of Terms on Your Bill
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Energy Efficiency Charge
Charge: 1.004¢/kWh
Description: The cost of energy efficiency program services offered by the company.
-National Grid Glossary of Terms on Your Bill
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Transmission Charge
Charge: 2.304¢/kWh
Description: The cost of delivering electricity from the generation company to the beginning of the Company's distribution system.
- National Grid Glossary of Terms on Your Bill
The transmission rate is the cost to deliver electricity over high-voltage lines running from power-generating facilities to electric substations, where it enters the distribution system and travels over local power lines to individual homes and businesses. Transmission rates are filed with the Federal Energy Regulatory Commission (FERC), which sets the actual rates. The Massachusetts DPU then oversees the incorporation of the federally approved transmission cost into the rates that power distribution companies in the Commonwealth charge their customers.
- Mass.gov
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