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

Home Baked Energy Efficiency with a Tasty Glazing posted on Sep 30

Home Baked Energy Efficiency with a Tasty Glazing

To reduce home energy consumption as rates rise, one town in Northwest Massachusetts has found a creative do-it-yourself solution.

Renewables To Blunt Power Outages From Major Storms posted on Sep 26

Renewables To Blunt Power Outages From Major Storms

To make sure that Massachusetts can avoid the energy-related problems faced by New York, New Jersey and Pennsylvania during Hurricane Sandy, the Community Clean Energy Resiliency Initiative will provide municipalities with reliable, renewable alternatives to diesel generators that also align with the Commonwealth’s greenhouse gas reduction and clean energy goals.

Energizing Future Generations posted on Sep 23

Energizing Future Generations

For the past two years, Massachusetts has participated in a federal program that recognizes schools working hard to educate future generations about clean energy and improvements in Massachusetts school buildings. This year, the Commonwealth will again participate in the U.S. Department of Education’s Green Ribbon Schools recognition program.