YARMOUTH — More than a few Outer Cape residents have been shocked by their electric bills this winter, especially those who rely on electric baseboard heaters or heat pumps to warm their homes.
The “delivery charges” on residential bills from Eversource have increased about a nickel per kilowatt-hour in the last eight months: from 16.6 cents last June to 21.7 cents in February. A nickel per kilowatt-hour may not sound like much, but on a 1,000-kilowatt-hour bill, it would mean an extra $50.
The increase puts the cost of delivering electricity well above the actual cost of the electricity itself, which Eversource describes as “supplier charges” on its bills.
The current supplier charge for customers who buy their energy from Eversource is 13.3 cents per kilowatt-hour. Customers who buy from the Cape Light Compact, a municipal aggregator that negotiates electricity rates on behalf of the 15 Cape Cod towns and the six towns on Martha’s Vineyard, currently pay 12 cents per kilowatt-hour.
Those prices are a bit elevated from the rates that prevailed from 2014 to 2021, according to Maggie Downey, chief administrator of the Cape Light Compact — but they aren’t unusually high, especially by more recent standards. Last June, Eversource was charging 17 cents per kilowatt-hour, and in early 2023, supply charges spiked to a high of almost 26 cents.
In other words, even though electric bills were high this winter, the electricity in New England’s grid wasn’t particularly expensive. There were a few reasons for that, Downey said, but the main one is also the simplest: when the weather is very cold, it takes a lot more electricity to keep a house warm.
“We had two years of mild winters, and my home’s bill at this time last year was $485,” Downey said. “The bill I just opened was for $700. When it’s in the 20s and teens and single digits at night, your heating system has to work a lot harder to keep the house at 68 degrees than when it’s 50 or 40 degrees out.”
Local Effects of Global Events
While about a quarter of New England’s electricity comes from two nuclear stations in Connecticut and New Hampshire, most of the rest comes from natural gas, according to Downey and Mariel Marchand, the power supply planner at the Cape Light Compact.
Nearly all that natural gas “is coming in pipelines from Pennsylvania, and if you think siting offshore wind is hard, try enlarging a natural gas pipeline across state borders — it’s not going to happen,” Downey said.
As a result, when demand spikes, New England relies in part on liquified natural gas (LNG) that comes from Louisiana. That gas is shipped from the Gulf of Mexico “around and up the coast on tankers to Everett, where we have an LNG plant to turn that gas into electricity,” Downey said.
Because liquified natural gas can be sold to countries around the world, it’s much more expensive than domestic pipeline gas, said Marchand. Pipeline gas costs $2 to $3 per million Btu normally, while European LNG prices run about $15 to $16 per million Btu, she said.
The Russian invasion of Ukraine is partly responsible for that price, as European countries turned away from Russian pipeline gas and shifted their purchasing to the international LNG market. “In order for us to get that LNG in New England, we have to pay the same price that they’re getting for it in Europe,” Downey said.
The seasonal need for LNG is “priced in” to the supply rates that utilities charge, Marchand said, along with state mandates for utilities to buy renewable power from solar and wind farms nationwide.
Rebates, Tariffs, and Loans
A statewide outcry over high utility costs peaked in February, when more than half the state senate and the state attorney general wrote letters to Gov. Maura Healey’s administration objecting to high gas and electric bills.
Despite the fact that household usage was the key issue this winter, in early March, Healey announced that the state would rebate $125 million in clean energy funds back to consumers in April in the form of a $50 credit on every ratepayer’s electric bill.
The state is also planning to implement tiered pricing for electricity, with moderate-income households paying a discount rate over the next five years, according to a March 10 statement from Healey’s office.
A trade war with Canada, which appears to be a goal of the Trump administration, could also affect future bills. That’s because hydroelectric power from Québec accounts for about 5 percent of New England’s electricity.
The Cape Light Compact doesn’t have any direct contracts with Hydro-Québec for renewable energy, Downey said, so the costs of new tariffs would be borne by all ratepayers in New England rather than by Cape Light Compact customers specifically.
The Compact does have a contract with the federal government for a new low-interest solar loan program, however: $2.2 million that it received from the U.S. Dept. of Agriculture’s Rural Energy Savings Program last December and another $2.7 million that it’s set to receive in December of this year.
The money will support about 130 loans at 2.75 percent interest for homeowners to install solar panels on their primary residences, Downey said. About 10 local installation companies are working with the Compact on the program; the larger national brands that lease, rather than sell, solar panels are often not good deals for homeowners, Downey and Marchand said.
“It was a lot of work to get us into this program,” said Downey, “and we had hoped to keep asking for continued funding after that $4.9 million is loaned out.”
The Trump administration has been firing federal workers and canceling all kinds of government contracts and loans, however.
“This USDA program has been around for a long time,” Downey said. “Now we’re just hoping that our legally binding loan agreement will be honored.”
