Post Content

David Cash

David Cash

Commissioner, Department of Public Utilities (DPU)

View David's Complete Bio

Ever wonder what you’re paying for every month when you get your bill?  There are basically four parts of your electric bill. 

Average residential electric rates
1. The Commodity used to make the electricity (Blue).  The commodity – natural gas, coal, or oil – that is used in power plants to make your electricity. This is by far the biggest part of your bill, and here in Massachusetts, where we are at the end of the energy pipeline, we are at the mercy of global energy prices.  See in the graph how the blue part, the Commodity, is volatile?  In 2005, when Hurricane Katrina hit, knocking out natural gas pipelines, the price of natural gas shot up, and so did our electricity rates.  Since we don’t have any coal, oil, or natural gas in Massachusetts, we have two ways we can reduce that blue part. We can ramp up energy efficiency and develop more homegrown renewable energy like solar and wind.  Both of these efforts have been priorities of the Patrick-Murray Administration, and this year, for the first time, Massachusetts is #1 in the country in energy efficiency beating out California.

2. The Distribution charge (Purple):  This is what it costs for your electric company to deliver the electricity to your house – the wires, substations, repair trucks, etc.  This is the only portion of your bill that the state directly regulates.  The Department of Public Utilities closely regulates the utilities and makes sure that what it charges for this portion is fair and reasonable.  This is also the portion of the bill in which there are charges to invest in the state’s energy efficiency and renewable energy programs.  For every dollar that is invested in all these programs, we get two dollars in savings!   And remember, these are how we reduce our dependence on fossil fuels that come from outside of Massachusetts.  Notice that the graph shows that this part of the bill has been relatively stable in the last decade – even with new energy efficiency and renewable investments.  

3. Transmission charge (Green):  This portion of the bill pays for the big interstate transmission wires that make up the backbone of the electric grid.  This is regulated by the federal government.

4. Transition charge (Red):  This is a leftover charge from when the state’s electricity system was restructured in the late 1990’s.  This charge will soon disappear.

Written By:

Tags: , , , , , , , , , ,

Recent Posts

Daylighting: The Bright Way to Save posted on Feb 11

Daylighting: The Bright Way to Save

Have you ever noticed that lighting can change your mood, depending on whether it’s natural or artificial? Going beyond occupancy sensors, the right lighting mix can also reduce energy consumption and save homeowners and commercial building operators’ money by using natural light with coordinated design.   …Continue Reading Daylighting: The Bright Way to Save

CoFFEE Funds Sustain Greenfield Community College posted on Feb 2

CoFFEE Funds Sustain Greenfield Community College

Greenfield Community College (GCC) is the first Commonwealth facility to complete an energy efficiency project through the Commonwealth Facility Fund for Energy Efficiency (CoFFEE), a self-sustaining revolving loan program for state facilities. Through a partnership between the Division of Capital Asset Management and Maintenance (DCAMM)   …Continue Reading CoFFEE Funds Sustain Greenfield Community College

Public Entities Recognized for Leading by Example posted on Nov 19

Public Entities Recognized for Leading by Example

Every fall, the Commonwealth holds the annual Leading by Example (LBE) Award ceremony at the State House. And every year, there is a surplus of impressive energy and sustainability achievements to celebrate. This year’s 8 winners, from state agencies, public higher education, and municipalities were   …Continue Reading Public Entities Recognized for Leading by Example