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PEABODY — For the second time in 2020, customers of the Peabody Municipal Light Plant (PMLP) are getting a rate cut.
PMLP recently announced that new Purchase Power & Fuel Cost Adjustment (PP&FCA) rates went into effect this month and will remain in place through the month of September.
“Each quarter, the PMLP sets the rates charged to its customers through changes to the Purchased Power and Fuel Cost Adjustment (PP&FCA),” said Peabody Municipal Lighting Commissioner Robert O. Wheatley. “The PP&FCA is adjusted based on PMLP’s cost to purchase power, which we get from a variety of different sources, as well as other factors. Having a diversified portfolio helps to keep costs to our customers stable over time and as low as possible. The decreases in costs that we are realizing today are in part based on investments made by the Peabody Municipal Lighting Commission over time.”
The rate cut will save money for residential and small commercial customers, PLMP stated in a recent press release. The typical residential customer’s bill will decrease by 1.5 percent, from $50.47 to $49.70 for a 500-kWh monthly usage. A commercial customer who uses 2,000 kWh per month will see its bill decrease by 1.6 percent, from $237.99 to $234.20. Industrial customers will see a slight increase of 0.6 percent
PMLP and the commissioners of the Peabody Municipal Light Commission (PMLC) said they are very pleased to see lower rates to help ease the financial burden that many PLMP customers face, especially given the present COVID-19 crisis. PLMP is governed by PMLC, an elected five-member board.
The rate cut comes on the heels of last quarter’s rate reductions when rates were reduced across all classes.
All told, since Jan. 1 of this year, rates for residential customers have decreased five percent, giving a ratepayer with monthly usage of 500 kWh an average bill that is below $50.
The press release stated that PP&FCA is adjusted quarterly to reflect changes in the actual cost of power purchased by PMLP, as well as other factors. PMLP says it is committed to continue to monitor rates closely over the next three months and will adjust them accordingly in the fourth quarter of 2020.
Peabody Municipal Light Plant is a community-owned, non-profit electric utility serving all of Peabody and portions of South Lynnfield. Unlike investor-owned utilities such as National Grid and Eversource that must raise money from their customers to pay their stockholders, all of the PMLP’s income is used to benefit its local customers. The sole mission of the PMLP since its founding in1891, is providing reliable electric service at the lowest possible cost.
With approximately 26,000 customers, PMLP is the third largest of 40 municipal electric utilities in the Commonwealth. Its power supply comes from a variety of sources throughout the Northeast, including two generators in Peabody that are owned and operated by PMLP, which helps support the regional power grid, but also serves as an emergency backup for PMLP customers in case of a grid failure.