PEABODY — For the first time in 12 years, Peabody Municipal Light Plant customers will be paying higher rates for electricity.
PMLP voted in late June to raise residential rates by 9 percent, which went into effect on July 1. Commercial and all other customers will begin seeing a 5 percent increase on Aug. 1. PMLP serves customers in Peabody and South Lynnfield.
PMLP Manager Joseph Anastasi said the rate increase was necessary in order for the company to stay financially balanced.
“As you may or may not know, we have not raised our rates here in Peabody since 2010. I think we need to raise our rates now,” Anastasi said. “We’ve nearly depleted our bond surplus account over the last 10 years to keep these rates static. At this point we need to improve our revenue collection in 2022 and the next four years to avoid further financial strain on our operating cash.”
Anastasi said the increased rates will result in an average of around $10 per each bill for residents (based on an average usage of 575 kilowatt hours), and approximately $150 for most commercial accounts (based on an average usage of 14,000 kw/hr). He said rising fuel costs, environmental awareness, supply chain issues, and “inflation that is ripping through America right now” prompted the increase.
Anastasi said Peabody’s electricity price bumps fall below the national average, which he said have risen by an average of 24 percent since 2010.
“The fact that we’re able to only raise either 9 percent or 5 percent is incredible,” he said. “We do that by basically excellent planning and through power resource management. The national expected average increase is expected to be 11 percent in 2022, so if you put the 24 and 11 together, that’s 35 percent. We were at zero the last 10 years.”
Anastasi said PMLP’s goals are two-fold.
“We want to continue to be either the lowest or one of the lowest in Massachusetts, especially in the surrounding communities,” he said. “Second, we want to ensure we can generate enough revenue to continue to deliver the service we’ve been providing while also embarking on these new ventures, including improved community outreach, new rate design and advancement of decarbonization efforts.”
PMLP must reach net-zero carbon emissions by 2050 under the Massachusetts Department of Environmental Protection’s state-wide goals.
“It’s much cheaper to produce electricity from fossil fuels, but it’s a balancing act to get the right mix of fossil fuels and carbon-free electricity generation,” Anastasi said. “Obviously, while we want to achieve net-zero carbon emissions, we have to be very careful how we get there. We just want to make sure the lights stay on.”
Anthony Cammalleri can be reached at [email protected].