Massachusetts city's basic power plan rises in price but undercuts utility's current rate by 9%

Salem, Massachusetts' new basic electricity plan will be priced about 9% below National Grid's current residential supply rate. Residents using the city's electricity-buying program will nonetheless see their prices rise in December.

Here's what to know

Salem PowerChoice will introduce electricity rates fixed until December 2029, according to Patch.

For each kilowatt-hour, participants in the municipal group-buying program will pay 18.130 cents on the plus plan or 15.560 cents for basic.

Through Jan. 31, National Grid's commercial customers have a fixed basic service rate of 15.568 cents per kilowatt-hour — just above PowerChoice's new basic price. The utility's residential rate, fixed through the same date, is 17.185 cents per kilowatt-hour.

January electric bills will be the first to reflect the higher supply price. For most PowerChoice participants, the city says, the program will nevertheless remain cheaper than National Grid's current residential and commercial basic service.

More background

PowerChoice's standard option includes renewable electricity purchases covering an extra 20% of supply. The city says it is eliminating that option.

Basic supplies the minimum renewable electricity required by Massachusetts law. It will become the plan for customers currently enrolled in standard.

The city says the intended benefits of those additional renewable purchases are not being realized. Officials blamed significant barriers to building new renewable-energy infrastructure on federal policy changes.

"With this most recent change, Salem residents on PowerChoice's basic plan will pay 9% less than National Grid's rate, meaning more money saved," Salem Mayor Dominick Pangallo said, according to Patch. "Over the decade of PowerChoice, those savings have come to around $24 million, back into the pockets of Salem residents. Programs like PowerChoice are one way we're working to reduce costs on Salem residents and make our community more affordable."

What can be done?

Standard customers who prefer an option other than basic must choose it; otherwise, their transfer will happen automatically.

A supply sourced entirely from renewables will still be available through the plus plan, but residents must request that option.

Customers can also change their PowerChoice option or withdraw at any time without a charge, giving them flexibility throughout the three-year pricing period.

"Salem PowerChoice, the city's electricity supply program, saves residents and businesses money on energy bills and lets them lock in multiyear rates for greater predictability," Pangallo said, according to Patch. 

Where can I learn more?

Electricity plans are changing in other Massachusetts communities, too, with potential savings for residents.

• In Melrose, power customers have 30 days to weigh city plan changes and options.

• Valley Green Energy rates are rising, but most households should still save money.

• Springfield is introducing a fixed electricity supply rate that could save residents about $17 monthly.

Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.