Billing Examples and Drivers of 2022 Rate Changes

Billing Examples of 2022 Rate Changes effective January 1, 2022

RESIDENTIAL EXAMPLE

Residential Rate A

COMMERCIAL EXAMPLE

Commercial C Example


Driver to Rate Changes – Commonwealth of MA Decarbonization Climate Law

In March 2021, Massachusetts passed a comprehensive climate law, An Act Creating a Next Generation Roadmap for Massachusetts Climate Policy, which for the first time establishes compliance standards for Municipal Light Plants (MLPs). This Law requires that the power sold by MLPs be sourced from resources that are 50% non-carbon by 2030, 75% non-carbon by 2040, and net-zero carbon by 2050.

In addition to making electricity generation net-zero carbon by 2050, the Law also aims to reduce emissions in the building and transportation sectors by shifting these uses away from fossil fuels and towards electricity – this concept is known as electrification. Increasing electrification will increase electricity usage (load).

While positive for our community and our future, the Massachusetts Decarbonization Climate Law will impact RMLD’s rates in a number of ways:

  • Distribution Energy Network System costs will increase as the RMLD upgrades the local distribution system (wires, poles, transformers, etc.) to ensure it is equipped to handle higher electricity loads as customers electrify their homes and businesses.
  • Because electricity is both produced and consumed in near real-time, the RMLD distribution network needs to be sized to handle the highest peaks plus a reliability reserve. Increased electrification will drive up overall usage as well as peaks, causing Distribution Demand costs to increase. In parallel, continuing energy efficiency and peak demand reduction programs will dampen this upward pressure.
  • The Efficiency Electrification Charge (formerly Energy Conservation Charge) will increase in January 2022 to support customers as they increase efficiency and electrification in their homes and businesses.
  • Wholesale FUEL Power Supply costs will increase as RMLD’s power supply portfolio shifts increasingly to non-carbon. Non-carbon generation sources are more expensive than carbon generation sources (currently, natural gas fueled generation is the majority of generation in New England). Unlike the Massachusetts Decarbonization Climate Law that establishes targets every decade, RMLD has set internal policy (known as Policy 30) which strives for incremental annual non-carbon goals to minimize rate shock due to the higher cost of non-carbon generated electricity. RMLD also consistently works to keep costs down by actively and diligently managing its power supply portfolio. Click here to see RMLD's Power Supply Portfolio including an outlook to 2030
  • Wholesale CAPACITY AND TRANSMISSION Power Supply costs are calculated as the product of RMLD peak loads and regional market prices. RMLD has programs for peak demand reduction including Shred the Peak. The regional transmission rates are increasing to support upgrades and new construction of transmission lines to compensate for the closure of local carbon generation plants. Capacity rates are governed by annual auctions and are expected to decrease through 2024 and increase beginning in 2025.
  • As part of RMLD’s Policy 30 that was updated in spring 2021 to accommodate compliance with the Massachusetts Decarbonization Climate Law, RMLD is adding a Renewable Choice option for ratepayers to increase their participation in retiring more certificates than the annual compliance level. Renewable Choice is an opt-in program, hence, customers will need to contact RMLD to participate. This opt-in program will be effective January 2022. More details will be published in the coming months.

Other Pending Potential Charges 

  • Green Communities is not an RMLD program. Green Communities is a Massachusetts program that provides grants, technical assistance, and local support from Regional Coordinators to help municipalities reduce energy use and costs by implementing clean energy projects in municipal buildings, facilities, and schools. If Green Communities is implemented by the Towns (Reading, Wilmington, North Reading, and Lynnfield Center), RMLD would simply be a program administrator to collect funds and forward those funds to the Massachusetts agency that manages the program.

Click here to read the press release announcement regarding 2022 rates