- Electric Rates 2022 - 2023
Electric Rates 2022 - 2023
As a publicly owned utility, Ipswich ELD customers have more control over rate, delivery, and the overall power portfolio. Maintaining a diversified power profile has allowed us to avoid the dramatic cost increase that some communities are experiencing, but it does not completely insulate us from rising costs across the energy market.
We are committed to helping customers manage these additional costs with energy savings opportunities, flexible billing options, and referrals to resources for energy bill relief. If you or a neighbor need help paying your bill, please visit our Financial Assistance page to learn more programs and organizations that may be able to provide assistance. If you wish to learn more about energy savings opportunities, please visit our ReSource Ipswich page.
Our staff is also available to assist with questions and flexible billing options at 978-356-6635.
Electric rates have increased due to rising wholesale costs for the power we receive.
We anticipate that costs will remain consistent into 2023.
Frequently Asked Questions
Exactly how much will the increase be?
The estimated increase from January 2022 to January 2023 is 25%.
How long will rates be this high?
Rates are likely to remain at current levels through 2023.
Will there be another increase?
We have structured existing rate increases in such a way that we hope to avoid additional increases in the foreseeable future. The ELD is exercising additional financial tools, including strategic drawdown of Rate Stabilization funds, to help mitigate additional increases. Of course, if market conditions are more severe than projected, additional rate increases may be required to deliver power to customers.
What is a balanced power portfolio?
The term “balanced power portfolio” refers to the resources that are used to produce the power that we consume, as well as the method of procuring those sources. Similar to a financial portfolio, where there might be a combination of savings, stocks, and perhaps a retirement account, the power portfolio can include different types of contracts and sources of generation.
In Ipswich, we strive to source our customers’ power from a diverse array of generators, including wind, hydro, solar, and nuclear resources. Additionally, we deliberately seek to hedge against market volatility by locking in prices with long-range contracts, rather than allow rates to rise and fall exclusively based on the open wholesale market.
What is in our power portfolio?
Approximately 65% of the Ipswich power portfolio is made up of contracts that have already locked in pricing, while 35% remains open to market volatility. Of the 65% that we have already procured, roughly half is sourced from hydroelectric facilities, one-quarter from nuclear, and the remainder from wind and solar.
Could this increase have been absorbed in another way?
The magnitude of this upcoming winter’s wholesale power costs would have been difficult to anticipate and absorb. The Ipswich ELD’s strategy of hedging a majority of its portfolio against market volatility has helped to delay and mitigate the impact of rising costs to a certain degree. Additionally, exercising Rate Stabilization funds will shield Ipswich customers from more severe increases in the coming months.
Where can residents go for help?
We work closely with community assistance organizations, like Action Inc. and Catholic Charities to connect them with customers who need help. Please visit our Financial Assistance page for more information about these resources. Customers can also call (978) 356-6635 and speak to one of our Customer Service Representatives about various resources for financial assistance with their utility bills.
Is this increase because of a push for electrification?
No. The increasing costs are based on inflated natural gas and oil prices resulting from a reduced supply and high winter demand. Geopolitical and economic forces and the national and international level are causing power prices to surge wherever there is a reliance on oil and gas for both heat and electricity.
Why are you encouraging people to switch to heat pumps, EVs and electric equipment if rates are increasing?
Electric rates are increasing due to the rising cost of natural gas and oil. In Ipswich, electric rates are often cheaper than other fuel sources, even at their elevated levels this winter. The efficiency of modern electrical equipment, like heat pumps, often makes them more affordable than fossil-fueled alternatives, especially when combined with smart controls and insulation.
What goes in to determining rates?
Ipswich ELD rates have several components.
- For most customers, there is a basic fixed charge each month. This minimum service charge is intended to cover the cost of producing the bill, regardless of how much electricity is consumed; for residential customers the fixed charge is $4/month.
- The base rate is intended to fund operations of the department, which are necessary to deliver reliable electrical service; residential customers pay 5.85 cents for every kilowatt-hour (kWh) consumed.
- The energy rate is the commodity cost of power (i.e. generation) and the cost of bringing that energy from throughout the region to Ipswich (i.e., transmission). These costs are incurred by the Ipswich ELD to procure energy on behalf of our customers; subsequently, these costs are passed on to our customers. The residential energy rate is anticipated to be 14 cents/kWh this winter.
How do these rates compare to National Grid?
In a statement on September 21, 2022, National Grid’s chief customer service officer said “This is the highest increase that I’ve ever seen,” in response to their utility’s upcoming rate increase. The increase will raise electric costs for the average residential customer by an estimated 64%. National Grid’s prices are already over 30% higher than Ipswich ELD’s rates; once their upcoming rate increase is implemented, National Grid’s rates will be more than twice the projected rates for Ipswich customers.