EVERSOURCE SAID its eastern Massachusetts basic service rate – the price it charges customers who direct the utility to procure electricity on their behalf – is going to jump to a record high on January 1.
The electricity price is jumping to 25.6 cents a kilowatt hour, up from the current level of 17.9 cents a kilowatt hour and last winter’s rate of 15.8 cents a kilowatt hour. The increase will boost the bill of a typical customer using 600 kilowatts a month to $246.80, an increase of nearly $47, or 23 percent.
A large price jump had been expected. The war in Ukraine has destabilized markets and sent electricity prices soaring. National Grid’s basic service rate jumped to 33.9 cents a kilowatt hour on November 1. Eversource said on Thursday that its basic service rate in western Massachusetts is going to 21.86 cents a kilowatt hour starting January 1.
About 29 percent of Eversource customers in eastern Massachusetts receive the basic service rate. The rest buy through their local city or town or directly from a supplier. Shopping around for the best deal makes sense.
Electric bills are divided into two parts – the supply portion, which is the actual cost of the electricity – and the distribution portion, the cost of delivering electricity to a residence.
Eversource is responsible for delivering electricity to homes in eastern Massachusetts and is not involved in electricity production. But for customers who don’t want to shop around, utilities purchase electricity on their behalf and pass the cost along to them. The utilities collect no profit on the deal.
This year, with the runup in prices, going into the market to purchase electricity for just six months has not yielded attractive prices. Longer-term contracts are netting better pricing.
Municipal aggregation is probably the most attractive alternative. Boston residents, for example, can sign up for one of three options available to residents. The prices, good until December 2023, range from 10.77 cents a kilowatt hour to 13.86 cents a kilowatt hour, depending on whether the renewable content is 20 percent or 100 percent.
Many other communities run similar aggregation programs.
Companies also sell electricity directly to customers, but Attorney General Maura Healey has urged residents to stay away from these so-called competitive sellers because of their untrustworthiness. To learn what’s available, click here.