Eversource is targeting a 43% rate increase for Massachusetts electricity customers this winter

In its latest estimate of how expensive energy will be this winter, utility Eversource is targeting a 43% increase in electricity costs for its eastern Massachusetts customers. For customers in western Massachusetts, that’s a 42% increase.

In filings this week with the Department of Public Utilities, the company proposed changing the baseline tariff — the raw cost of the electricity you use — for customers in both of its territories.

Electricity bills for rate payers in eastern Massachusetts would increase from about 18 cents per kilowatt-hour to 26 cents per kilowatt-hour, while rates in the western part of the state would increase from 15 cents per kilowatt-hour to 22 cents per kilowatt-hour.

If those rates are approved beginning Jan. 1, the average consumer using 600 kilowatts of electricity per month would see bills increase by $47 per month in the eastern part of the state and $39 per month in the western part of the state .

This does not necessarily mean that interest payers will only see a rise of $47 or $39. The company plans to increase electric delivery fees as well, but hasn’t filed those requests with the state yet.

(Sample invoice courtesy of Eversource. Annotation by Sara Plourde/NHPR)
(Sample invoice courtesy of Eversource. Annotation by Sara Plourde/NHPR)

For most New England rate payers, the cost of electricity changes twice a year. Energy suppliers calculate how much electricity they will need over the next six months and then enter into contracts with different suppliers. Utilities make their profit from the infrastructure and power supply, not the power they deliver to you. The prices you get on the electricity market are the prices you pay.

“The energy market continues to be extremely volatile, and energy costs can vary widely depending on when we receive quotes for generator power supplies,” Eversource spokesman Christopher McKinnon wrote in an email.

Different utilities hold auctions and change their tariffs at different times of the year, which may help explain some of the regional price variability. (It also explains why National Grid customers’ rates in Massachusetts rose on Nov. 1.) But in general, electricity rates are soaring for everyone in New England because the fossil fuels we depend on are so expensive right now are.

Prices went into a frenzy after Russia invaded Ukraine earlier this year. Add in inflation and supply restrictions and the result is unusually high utility bills.

Compared to last winter, the average Eversource customer in eastern Massachusetts is paying $60 more for electricity, while customers in the western part of the state are paying $49 more for electricity. National Grid customers, meanwhile, are already paying $114 more per month compared to last winter.

If you’re wondering why National Grid’s rates are so much more expensive, the answer is again: timing. Not only were fossil fuel prices higher when it held its auction, but its winter prices cover November through April, the coldest months of the year when demand drives prices higher. Eversource’s winter tariffs run from January through June, which means they include some spring months when wholesale energy prices tend to be lower. Historically, National Grid customers have paid less for summer electricity than Eversource customers.

Both utilities say gas customers should expect higher prices again this winter.

Eversource also called for a big rate hike for Connecticut customers this week. There, the company says it needs to double electricity costs – from 12 cents per kilowatt hour to 24 cents per kilowatt hour. For the average interest payer, that means an additional $85 per month.

The situation is even grimmer in New Hampshire, where rate payers are already paying for some of the highest utility bills in the region. Eversource officials recently told state regulators that they are concerned about being able to source enough power for customers at next month’s auction. If that’s the case, a company lawyer said, the electrical suppliers bidding will likely do so at “extraordinarily high” prices.

When asked if Eversource saw fewer bids than normal at the last Massachusetts energy auction, McKinnon said the answer was yes. Across the region, “we are seeing higher prices due to constrained gas supply and high price volatility, and less competition,” he wrote.

The silver lining is that there is plenty of help available to Massachusetts residents worried about paying their energy bills this winter.