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

Banking on Residential Solar Power posted on Sep 16

Banking on Residential Solar Power

“It’s a house, it’s a car, it’s a … solar panel?” In the coming months, the Department of Energy Resources (DOER) is hoping a new residential solar loan program will spark that question and interest in renewable power at local lending institutions across the Commonwealth.   …Continue Reading Banking on Residential Solar Power

Building Efficiency Gurus Exchange Ideas on Just About Everything posted on Sep 5

Building Efficiency Gurus Exchange Ideas on Just About Everything

The American Council for Energy Efficient-Economy (ACEEE) selected me to present a paper on the Commonwealth’s Green Communities Program at ACEEE’s Summer Study on Energy Efficiency in Buildings. It felt like going to college – the seniors all knew each other, while the freshmen were   …Continue Reading Building Efficiency Gurus Exchange Ideas on Just About Everything

Comparing Homes – Energy-Saving Enters the Equation posted on Aug 28

Comparing Homes – Energy-Saving Enters the Equation

Until recently, there was no way to easily figure energy efficiency into a home buying decision. Enter HomeMPG, a Massachusetts energy-saving initiative to pilot an energy performance score (EPS) in residential homes. This “asset” rating that’s analogous to a car’s MPG rating. Behavior is taken out of the equation so that any home’s energy use can be compared to any other home, allowing for an apples-to-apples comparison.