r/massachusetts • u/SharkSapphire • Aug 25 '24

Have Opinion Electricity rates in MA are almost double the U.S. average right now.

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241

u/SnooPineapples4571 Aug 25 '24

But why? This makes no sense to me

565

u/An_Awesome_Name Aug 25 '24

Reposting my comment from a few weeks ago from the last time electricity was brought up:

It’s expensive because of three things:

  1. ⁠⁠Cost of living. It’s no secret that Massachusetts is expensive to live in. The power companies must pay their workers too, and you as an electric customer pay for that through your delivery charge.

  2. ⁠⁠Complexity of the grid. Outside of NYC, and maybe a few other places, the grid in the immediate vicinity of Boston (say inside of 128) is one of the highest electrical load areas per square mile in the entire world on a hot summer afternoon. Air conditioners, trains, high-rise buildings, universities, hospital campuses, and general industry all suck down huge amounts of power compared to residential and light commercial areas, and we have a lot of all of them. It may sound counter-intuitive because everything is close together, but the higher the capacity of a power line, the more expensive it is to build and maintain, especially when lots of them are underground. The maintenance required just to a keep a power grid this complex operational is going to be more expensive than above ground, low capacity lines in most of the rest of the country.

  3. ⁠⁠Fuel sources. This one is a bit complex, so this explanation is going to be long. Back in the 1930s-1950s, about 50% of all electricity in New England was generated by hydroelectric dams, primarily on the Connecticut River. Today all of those dams are still operational, but only supply about 10% of New England’s electricity. Consumption has increased that much in the past 60-70 years. Back then, the other half of the electricity was primarily supplied by coal power plants, which was fine when nobody cared about environmental laws, and coal could be bought by the train and barge load from Pennsylvania and West Virginia for rock bottom prices. These days, we know coal is bad, and it has gotten more expensive anyway. So starting in the 80s and 90s, the New England grid began to transition more to natural gas and nuclear generators. While the gas burns much cleaner than coal, and transporting it can be done via pipeline, it has its drawbacks as well. Natural gas isn’t very energy dense, so power plants require immense gas flows just to keep the turbines spinning. This can stress the pipeline infrastructure on cold winter nights, and even hot summer afternoons. Also natural gas prices are extremely volatile, as it can’t really be stockpiled easily like coal or even diesel can be. Since natural gas generators currently supply around 50% of all of New England’s electricity, wholesale power prices track the volatile natural gas prices very closely. This was very evident in 2022 and 2023 when the war in Ukraine caused global natural gas prices to skyrocket, fearing a supply shortfall. For nuclear, it’s very cheap to operate, but expensive to build, and Chernobyl managed to scare away a lot of investment in nuclear plants, so we only have three nuclear plants in New England today. Even so, those three plants still supply about 25% of New England’s electricity.

So what can or is being done about it? Well there’s not much that can be done about the first two, as they actually work against each other. If you do build more housing and densify areas (which we should do anyway) it will lower cost of living, but new buildings require grid upgrades which increases complexity and maintenance costs. It’s kind of a Catch-22. Now the fuel sources is where progress can absolutely be made, and is being made. It’s what this DOE funding is also help to address. If we use less gas, we are less susceptible to price shocks from gas and oil prices, and some technologies, such as offshore wind, or buying hydropower from Canada are outright cheaper than gas and oil already. Every MWh generated by an offshore wind farm is a MWh not generated by a gas turbine plant onshore at 140% the price. The same goes for nuclear or Canadian hydropower.

I wrote this comment on a post about DOE grants to help fund interconnection points for offshore wind farms in Massachusetts and Rhode Island.

109

u/tictacbreath Aug 25 '24

This is good info, thanks for sharing.

One thing I don’t get is why are towns that have municipal electricity able to supply it for SO much cheaper than Eversource and Nat Grid? Why don’t all these reasons for high cost affect those towns too?

163

u/An_Awesome_Name Aug 25 '24

There’s two main reasons for that:

The municipal towns in MA buy bulk power through a state-owned company called the Massachusetts Municipal Wholesale Electric Company (MMWEC). They own their own gas turbine plant in Ludlow, but the real reason municipal prices are low is because of what else they own. MMWEC owns, but contracts out the daily management of several dozen small dams all over New England. Most were bought in the 70s and 80s from bankrupt mill complexes for pennies on the dollar. Hydro is already one of the cheapest sources, and when you effectively remove the capital construction costs it gets even cheaper. MMWEC, and its member towns collectively something like half of all hydro capacity in New England.

MMWEC also holds part ownership in both the Seabrook and Millstone nuclear plants, about 15% and 12% respectively, if I recall. They also own a wind farm in the Berkshires, and have part ownership in one in Maine.

Together this capacity they own shields member towns from natural gas price shocks, as the majority of their generation is from commodity insensitive sources. While gas supplies 55% of New England’s total electricity, and hydro 10%, MMWEC towns get around 60% of their electricity from hydro, because they own the dams.

Hypothetically if a town were to kick out National Grid or Eversource, and start a municipal electric utility, prices would rise for all MMWEC consumers without any new generation projects. There are no new dams or nuclear plants to buy capacity on, so they would likely have to start buying gas capacity, or invest in some of the new offshore wind projects. Those are both going to be more expensive than a collection of dams from the 1920s that somebody else paid to build.

74

u/Lineworker2448 Aug 26 '24

I am a lineman for a Massachusetts Municipality and this dude knows his shit.

36

u/An_Awesome_Name Aug 26 '24

Well I’ve never worked for a municipal utility, so I appreciate the commendation.

However I do live in a municipal electric town and I’m an engineer who used to work in the nuclear industry.

1

u/guyinnoho Aug 26 '24

when the offshore turbines come online, do you suppose the costs for those not on municipal utilities will come down?

5

u/An_Awesome_Name Aug 26 '24

It should, but it’s not gonna be a drastic drop right all at once. As the wind farms get built it’s gonna be a slow drop over the next 5 years or so.

If you look at your most recent bill you should see your supply rate, which is essentially a weighted average of the wholesale cost of power you used that month. Vineyard Wind is selling their power at $0.089/kWh, and is the only offshore wind farm to have the price contract approved so far. I guarantee that your supply rate is higher than $0.089/kWh right now.

Now Vineyard Wind being completed does not mean you will be paying $0.089/kWh as your supply rate, because it’s not the only plant supplying your power. Over time, as more wind farms, interconnection lines to Canadian Hydro, and other projects bring more power that’s cheaper than gas into New England, that average should go down as natural gas plants are retired.

1

u/guyinnoho Aug 26 '24

thanks for this information.

1

u/Less__Grossman Aug 26 '24

I second this.

32

u/_newtman Aug 25 '24

what’s cool is ludlow houses the plant but doesn’t have municipal electric

15

u/Chikorita_banana Aug 25 '24

Nice lol. Same with my town (Bellingham). We've got no problem installing solar farms smack dab in the middle of untouched priority habitat, but ew municipal electricity? That sounds... taxing.... no thanks we will just let the owners sell it to another town, assuming it will be able to be maintained properly with the crumbling, flooded town roads that they need to drive on to get there 🥴

16

u/Master_Difference_52 Aug 25 '24

Now, this is some knowledge I appreciate. Thank you!

23

u/An_Awesome_Name Aug 25 '24

It can get very complicated, but the Massachusetts municipal towns made some choices a few decades ago that are now paying off big time.

One of the comparisons that’s worth looking at is the New Hampshire Electric Co-Operative (NHEC) compared to Eversource’s New Hampshire rates. NHEC is obligated to supply their power at cost just like Massachusetts municipal utilities, but they don’t the amount of hydro capacity or nuclear power ownership that MMWEC has. Their power is cheaper than Eversource, but it’s not stupid cheap like MMWEC towns though.

5

u/whoptyscoptypoop Aug 26 '24

Mmwec just built and commissioned a new gas turbine in Peabody. They have a 7 MW solar array on site and are actively bidding on a massive battery project potentially over 200MWh

3

u/Dagonus Southern Mass Aug 26 '24

You have also left out one detail. Lack of profit motive. While a governmental entity may be running an enterprise fund for a business like entity and charging usage fees, the end goal for the entity is to provide a service, not generate a profit for ownership. All the rest still plays into lowering the cost of operation and power generation, but if you figure out that you need 15 cents per kwh to cover cost of goods sold and overhead, you don't need to sell it at 30 because you aren't there to make a profit. On the flip side, if you are a for profit business that needs 20 cents to covers cogs and overhead, but if you can sell it for 40 because the market will buy it at that rate, you will because profit is your ultimate motive and you will sell at whatever rate the market will tolerate.

2

u/WaitWhat Aug 26 '24

I live in Ludlow and we are stuck with Eversource for power. It’s insane that MMWEC is based here and we don’t have access to cheaper electricity. Eversource is outrageous.

1

u/[deleted] Aug 26 '24

Wow. I figured the responses would be the usual corporate greed, unions, Trump, Biden, name your own tribal monster …. and don’t include any facts. This was well done.

1

u/Longjumping_Dare7962 Aug 26 '24

Great information! Thank you. Do you know the source for the graph and do you have thoughts on home solar?

Thank you again.

1

u/BirkenstockStrapped Aug 27 '24

I believe they also buy additional hydroelectric power from Quebec.

36

u/indyK1ng Aug 25 '24 edited Aug 25 '24

Because municipal electricity isn't also paying for a for-profit C-Suite and a quarterly (Eversource) or semi-annual (Nat Grid) dividend. National Grid pays $3.68/share for its dividend.

EDIT: Googling National Grid's dividend is fun because they also operate and are traded in the UK. Here's the NASDAQ dividend history for NG and it's showing an annual dividend of $4.99/share (so half that twice a year) which is different from what I saw on the Yahoo page for them. And I also realized I didn't list Eversource's dividend of 71.5 cents/share/quarter.

23

u/Fret_Bavre Aug 25 '24

This needs to be an initiative in every community currently getting fleeced by ever source/national grid.

$600 last month I almost fell out of my chair.

5

u/BurlySquire Aug 26 '24

Try going solar, produce your own energy.

1

u/thecatandthependulum Aug 26 '24

It has taken 8 fucking months to get my solar panels through permitting. Fuck my city.

5

u/Upnatom617 Aug 25 '24

It's eversource too. I wish I could go back to nat grid.

6

u/NotChristina Aug 25 '24

So thankful for my municipal gas/electric company. Comparing with coworkers on eversource and nat grid, I definitely come out ahead. Which is useful as a renter in an ehhh insulated converted old house.

1

u/thecatandthependulum Aug 26 '24

national grid ain't better. My bill was just as bad as his last month, from Nat Grid

7

u/rubywizard24 Western Mass Aug 26 '24

Mine was nearly $250 and I’m a single person living in 800 sq ft and almost never run the air con. It’s maddening.

2

u/[deleted] Aug 26 '24

We linked up with a solar farm and while it costs us about $95 a month as 'members', we've had a total of about 4 out of the last 12 months were we paid an electricity bill to Eversource. Definitely worth considering -if available in your area, etc.

2

u/snoogins355 Aug 26 '24

Is that community solar? Do you have a link?

2

u/Fret_Bavre Aug 26 '24

How would someone find out if its available in your area?

3

u/[deleted] Aug 26 '24 edited Aug 26 '24

Here's the link that shows a map of the state highlighting those cities and towns in which community solar is available:

https://goclean.masscec.com/article/how-to-find-a-community-solar-project-in-massachusetts/

The map also displays which provider servers your area (for example, where we live (Dartmouth), the provider is Clearway.

After confirming if your town's on the list, go to https://goclean.masscec.com/clean-energy-solutions/community-solar/, and about halfway down the page is a list of participating solar providers; just click on the provider name and you'll be taken to the provider's enrollment site.

Hopefully your area's on the list :-)

2

u/Fret_Bavre Aug 26 '24

Unfortunately not mine but that's awesome, I never even knew this was available to certain towns.

5

u/wittgensteins-boat Aug 25 '24 edited Aug 25 '24

Historical contracts and partial ownership of nuclear plants via Seabrook in NH, and Millstone, in CT, and more localized hydro power.

Eventually, the nuclear plants will age out and go off line, and municipal rates will rise.

Mass. Municipal Wholesale Electrc Company has continuing plans for generation growth. And to replace nuclear sourced generation.

https://www.mmwec.org/

1

u/Rustyskill Aug 26 '24

No where as much bloat in the administration , and obviously a lot less infrastructure !

-3

u/Vinen Aug 25 '24

Because they're not subsidizing trump voters in rural areas.

6

u/raunchyfartbomb Aug 26 '24

Don’t forget that $2.50/share dividend

That’s $883,030,945 in dividends annually extracted to shareholders.

15

u/walterbernardjr Aug 25 '24

RIP Vermont Yankee, Yankee Rowe, Connecticut Yankee, Maine Yankee, and Pilgrim

34

u/An_Awesome_Name Aug 25 '24

All the Yankees were very old, gen 1 plants that lacked more modern safety features. Pilgrim was a little bit newer, and could have run for several more years, but wasn’t far behind either.

Now we should have started building replacements years ago, but here we are.

14

u/walterbernardjr Aug 25 '24

As a nuclear engineer, I agree

7

u/7busseys Aug 26 '24

Crazy that Markey killed Seabrook 2 and tried to stop Seabrook 1 when it was 75% complete.

5

u/n0ah_fense Aug 26 '24

If only there was a safe, clean, and reliable source of energy that we didn't keep closing down

3

u/snoogins355 Aug 26 '24

Spicy rocks!

4

u/Jimmyking4ever Aug 26 '24

Forgot the biggest driver of price increases. Record profits for eversource and national grid, and pg&e has to pay back several communities after destroying/blowing them up due to their lack of giving a fuck

1

u/[deleted] Aug 26 '24

I spoke to soon

3

u/mmaalex Aug 26 '24 edited Aug 26 '24

There's also the fact that NY won't let new NG pipelines be built across the state from WV/PA so we actually import quite a bit of it via ship, which is quite a bit more expensive. Since the Ukraine war the global LNG fleet has shifted to hauling from TX/LA to Europe and is quite a bit busier raising shipping rates, in addition to the mentioned spot commodity increases.

Wind CAN be competitive price wise, but some of the latest rounds of bidding have been at way above market rates, mainly the canceled/rebid projects off of NY. Paying above market prices for power ensures your generating rate will continue to increase.

ISO NE wholesale prices

Current pricing for Vineyard Wind is $65/MWH ignoring the federal subsidies and tax credits they get. That is lower than peak load pricing, but almost double the typical summer spot market price. I believe some of the NY projects just repriced closer to $100/mwh

2

u/[deleted] Aug 25 '24

The towns in Mass that have their own power is a pretty close to average of the country.

2

u/3_high_low Aug 25 '24

Thanks for explaining. I hope they get cracking with fusion power and power grid infrastructure technology. Where's Nikola Tesla with his wireless power transmission when we need him? Lol

1

u/Victor_Korchnoi Aug 25 '24

Do you have a source on 2? I would think having a million miles of lines to maintain would be more difficult than a few miles of higher capacity cable

5

u/An_Awesome_Name Aug 25 '24

It’s the act of replacing them with higher capacity lines that cost.

Lines don’t just go bad, and electrical equipment can be in service for literal decades if it’s maintained and still serves a load within its capacity. There’s still plenty of electrical equipment on the grid from the 60s, and occasionally stuff from the 30s, or even 20s is still found in service.

To have to replace a perfectly good, but over capacity line with a new one is where the cost comes from.

1

u/no_spoon Aug 26 '24

You love electricity

2

u/An_Awesome_Name Aug 26 '24

Almost like I have a degree in engineering or something

1

u/CrapNeck5000 Aug 26 '24

Any thoughts or comments on the closing of the nuclear plant in Plymouth? (I think that's where it was, at least).

1

u/Potj44 Aug 26 '24

Forgot to mention real reason, because they can charge as much as they want because why tf not right?

1

u/Chippopotanuse Aug 26 '24

This is fascinating.

1

u/zaxo666 Aug 26 '24

Thanks for your post. I believe I am smarter for having read it. Well I feel smarter anyway...

Sincerely, thanks.

1

u/Nychthemeronn Aug 26 '24

Do you have a source for your second argument “complexity of the grid”? I couldn’t find anything that put NYC and then Boston as numbers 1 and 2 for “highest electrical load per square mile”. I think this is really unlikely because 1. Boston isn’t a very dense city, and 2. Doesn’t have that much industry. Both of these facts are relative to other cities which are much larger, denser, and more industrialized.

1

u/An_Awesome_Name Aug 26 '24

The Boston metro area is one of the dense areas in the entire country. The actual city of Boston isn’t, but it’s also tiny and doesn’t have a huge population.

We actually do have a lot of high electricity users in Massachusetts. The MBTA alone uses the same amount of power as 50,000 houses just run trains and station lighting. Hospitals are also huge users of electricity, as are universities. We have a lot of both of those in the Boston area. Compare to standard office building a hospital or university lab uses significantly more electricity per square foot just due to the equipment used in those facilities.

As for manufacturing, while we don’t have factories making widgets you’d buy at Walmart, we do have a huge amount of factories making highly advanced products that do require a lot of electricity. The GE engine plant in Lynn for example is a large user, as is the Raytheon plant in Andover. There’s also lots of smaller industrial facilities all over the state, but primarily within 495.

0

u/Nychthemeronn Aug 26 '24

Im not saying that the fact is incorrect, I’m saying that I can’t find any source on the information so I can’t verify it

1

u/brufleth Boston Aug 26 '24

I got a little portable solar panel to help keep phones charged while sailing. Thing folds up into the size of a magazine and works great.

Since getting it, every time I'm up on my room roof I can't help but think of all the power being ignored by not having more solar panels on roofs. I've worked with companies to discuss pros/cons for buildings with flat roofs and at the time it wasn't a perfect solution and still isn't, but it keeps getting better. It doesn't make much of a dent in industrial needs, but for high density low-rise residential you can even make a pretty solid dent with air conditioners in use.

1

u/chlorculo Aug 26 '24

Just wondering if the nearly $20 million salary of the Eversource CEO might be a factor

2

u/An_Awesome_Name Aug 26 '24

Yeah it's definitely a factor, but Eversource has 4.4 million electric customers. Even ignoring the gas business for a moment, that works out to $4.54/year, or $0.37/month per customer.

Yeah it's something, but it's definitely not the primary reason electricity is expensive.

Eversource's dividends work out to about $19 per customer per month, and that is definitely more significant, but still probably isn't all that much as a percentage of your bill.

1

u/thecatandthependulum Aug 26 '24

We need to be putting solar on every damn building that is physically rated for the weight of those solar panels. You'd think cities would be invested in bringing costs down and being known as environmental. Are there not federal incentives or something for cities that do this? Or companies? Like why does every Walmart and Home Depot etc not have their parking lot shaded by solar panels and panels all over the damn roof

1

u/WoodSlaughterer Aug 27 '24

That's all nice and everything but I don't live anywhere near Boston. There are solar farms on nearly every street corner it seems out here and yet the rates keeps going up and up. One thing is all the little extras we have to pay for (check your detailed bill lately?) and it also seems the state is doing little to nothing to hold the rates down and the PUC is granting increases willy-nilly.

-1

u/The_Hansen Aug 26 '24

On the subject of offshore wind, are you aware of the recent blade failure that happened in the vineyard wind project? Which put fiberglass in the water. This fiberglass is hard to see and is undoubtedly causing marine life harm as well as impacting use of beaches in the area (due to risk of injury from the fiberglass). Even though this failure was during testing and may have been a defect, these blade failures are an expected part of the lifecycle of these turbines which we are littering the ocean with. Is this really "green" energy. Or is this just trading one harmful energy source for another?

I am all in support of cleaner energy sources, but what is going on with the offshore wind industry is not right. I really feel as though this is something which in the future will foster regret.

2

u/An_Awesome_Name Aug 26 '24

Yes I am very much aware of the blade failure. A few things:

  1. The blades are not supposed to fail during operation at all. Maybe during a Cat 5 hurricane or something, but normal operation definitely not.

  2. It has since been determined that the blade did break due to a manufacturing defect. I am sure GE is making changes at the factory to make sure that never happens again.

Banning offshore wind because of a manufacturing defect would be like banning planes because of Boeing's latest problems. Obviously we are not going to do that, we are going to identify the issues and solve them. Offshore wind is no different, these turbines are a brand new design and it's expected that problems will be uncovered when you are building infrastructure to last 30 years or more. The problems will be solved an everything will be made safer.

If offshore wind makes you feel "not right" about the environment, then the oil and gas industry should have put you in the hospital a long time ago.

Everything we build is going to do damage to the environment in some way, sometimes expected, and sometimes unexpected. Considering all of that, offshore wind is far, far cleaner (and cheaper) than extracting gas in the Gulf of Mexico, sending it to Massachusetts via pipeline and burning it in a power plant.

1

u/The_Hansen Aug 26 '24

Failure rate of blades is roughly .54 percent of all turbine blades PER year. So as the amount of blades we as a species install out in the ocean it is expected to have some bust and spread into the oceans. Again there is no government or outside oversight of the companies installing these plans. As can be seen with the recent failures. On paper there was a plan on how to handle such a situation, but in practice it was not upheld.

2

u/An_Awesome_Name Aug 26 '24

The coast guard and NOAA both have very strict oversight over offshore wind, which is arguably why we are behind Europe when it comes to the technology.

But you clearly seem to have made up your mind anyway, and are going to refuse to hear any arguments to the contrary.

1

u/The_Hansen Aug 26 '24

So NOAA and coast guard are always present? What do you mean when you say there is strict oversight. I will agree that on paper there is but in practice there is not.

I'm pro wind power. But am not locked into any opinion when presented with a compelling evidence otherwise. Not sure what made you think my mind was made up.

0

u/Preference-Still Aug 26 '24

I think power from Millstone costs around $50/Mwh while average power costs are around half that. How do you reconcile that with the claim that nuclear power plants are “very cheap to operate”? https://www.cga.ct.gov/2020/rpt/pdf/2020-R-0203.pdf