April 1 may be known as a day of trickery, but a lower electric bill was no April Fool’s Day joke for Peabody Municipal Light Plant customers in either Peabody or Lynnfield.
PMLP announced a 15 percent rate reduction on April 4. The lower rate went into effective April 1.
In a letter to ratepayers dated April 4, PMLP said that the primary factor in the reduction was “lower-than-forecasted market gas and electricity, brought about largely from the mild winter experienced in New England.”
The letter added that the reduction “is a result of a reduction to the Purchased Power and Fuel Cost Adjustment (PP&FCA) charge, and effectively negates the prior 16 percent increase that PMLP issued on Jan. 1 due to concerns of significantly elevated winter energy prices.”
PMLP Manager Joe Anastasi commended the commission’s commitment to its “four pillars of safe, reliable, cost-effective power while being environmentally sustainable” in the letter.
“I am pleased to be able to work with the commission to contain the rates that PMLP customers pay, while not depleting reserves, although we came close!” said Anastasi.
He noted how it has become increasingly difficult to manage the uncertainty of the wholesale market.
“The volatility of this market is entirely responsible for the required increase in January, and the decrease we’re seeing now,” he said.
The letter said New England is still very much dependent on natural gas for electric generation and that the cost of gas and therefore electricity, especially in the winter, is strongly tied to demand.
“Had we experienced a winter with prolonged stretches of below-average temperatures, limitations in gas availability could have sent prices soaring higher than what was experienced,” the letter said. “Since these spikes in energy prices were minimal, we’re passing those savings on to you, the customer.”
According to PMLP Commissioner Bill Aylward, PMLP has been able to maintain low rates in Peabody due to “resilient long-term planning, strategic implementation and usage of reserve funds, as well as continued support of peaking units as additional revenue streams.”
“PMLP is continuously re-evaluating its energy and capacity sources with an eye on environmental sustainability,” Aylward said. “We’ve been on this path since the 1980s.”
Aylward said PMLP’s energy portfolio is already 43 percent carbon-free, which positions PMLP “well” for meeting net-zero goals. In addition, PMLP will add a utility-scale battery later this year, which he said “will add new ways to help shave the peak and therefore dollars from customer bills.”
According to Aylward, the goal of being carbon-neutral by 2050 is a priority for PMLP. He commended Anastasi for navigating “a difficult landscape of unknowns,” citing the recent removal of a large wind project because of project delays and changes in project finances.
“This is just another factor in developing our rate structure,” Anastasi said. “We must not get discouraged. We must not give up (and) while PMLP is not suggesting an extension on the ultimate 2050 goal, it is raising awareness to the ever-changing landscape in the path to carbon neutrality. We’ll continue to look at wind, solar, hydro and nuclear power to get us there. And we strive to get there first!”
Anastasi added PMLP has been successful in having “some of the lowest rates in Massachusetts (by) investing in a diverse power portfolio and exploring all the options for purchasing electricity that are both clean and reliable.”
“This winter was a hard one to predict, with the war in Ukraine disrupting the availability of gas which has the potential to drive up cost. But we’re happy to be able to say we’re able to reduce bills. It’s a refreshing change,” Aylward said.
The letter recommends that ratepayers who have questions about PMLP’s electric service are welcome to make inquiries using PMLP’s online quarterly energy awareness forum, which is available at any hour. To participate in the energy awareness forum, visit pmlp.com/Energy-Awareness.html.
PMLP services all of Peabody and South Lynnfield.
