Massachusetts electricity rates will rise, but most households will still save money

A new electricity supply contract will raise Valley Green Energy rates beginning Nov. 1 in Northampton, Amherst, and Pelham, even as the regional buying program is projected to come in below standard utility supply prices for most residential customers.

For Massachusetts residents already coping with high energy bills, that means some savings may continue. It is also a reminder that even cleaner, community-based electricity options can become more expensive as electricity supply prices climb.

Here's what to know

According to the Daily Hampshire Gazette, the 2024 program serving the three Hampshire County communities will switch to new rates under a two-year agreement with Direct Energy Services. Those prices will be locked in through November 2028.

For Northampton customers, National Grid's residential supply price is 17.185 cents per kilowatt-hour. Valley Green Energy's new rates will be 16.29 cents per kilowatt-hour for basic and 18.79 cents for the 100% green option.

Amherst and Pelham, which are in Eversource territory, have a residential supply price of 15.934 cents per kilowatt-hour. Under Valley Green Energy, the basic option will be 15.83 cents per kilowatt-hour, and the 100% green option will be 18.33 cents, the Gazette reported.

That means most residential customers enrolled in the basic tier are expected to save money, though only by a small margin in Amherst and Pelham.

More background

The new contract also changes how the program sets its rates. Instead of one blended price shared across all three communities, Valley Green Energy will use pricing tied to utility territory.

Because National Grid serves Northampton and Eversource serves Amherst and Pelham, the program will split those prices accordingly, per the Gazette. The change is intended to keep rates competitive while preserving the potential for savings across the program.

Any comparison with utility rates could shift since the residential supply prices from National Grid and Eversource are fixed only through Jan. 31.

For small business and commercial customers, the new rate will be slightly higher than utility prices. That limits the benefit.

What's being done?

As part of that deal, the program is replacing its single blended rate with utility-based pricing to keep prices competitive and preserve the possibility of savings.

Participants can leave the program or opt out at any time, and there is no fee or penalty for doing so. Customers will first see the price change on their December electricity bills.

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