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2022 Danvers Electric Rate

Posted on January 13, 2022

During the Municipal Light Board meeting held on December 21, 2022, the Board discussed the electric rates for 2022.  The rate discussion was broken down into two components: fuel charge and the operational costs. The fuel charge covers the cost for Danvers Electric to purchase electricity on the wholesale market and have it delivered (transmitted) to Danvers. The operational charge covers the cost of owning, maintaining, and operating the Town’s electric grid.

The cost of purchasing and delivering power to Danvers is projected to increase in 2022.  There are two cost drivers behind this: increased costs to construct and maintain new transmission lines and a projected increase in the cost of power generated with natural gas.  The power used by Danvers comes from a wide variety of sources including nuclear, solar, wind, hydroelectric, and natural gas.  Due to the projected increases, the Board voted to increase the fuel charge (Purchased Power and Fuel Adjustment) from $0.0528 to $0.0570 per kWh for residential customers and from $0.0552 to $0.0610 per kWh for all other customers.

The Board voted to keep the operational component of the rate and the customer charge the same as it was in 2021.  “The Customer Charge in Danvers is well below both the industry standard as well as what was recommended in the 2019 Cost of Service Study,” said MLB Chair Bill Hayes. “However, due to the market-based increase to the fuel charge, any adjustment to the customer charge was deferred to a future discussion.”

The fuel charge will represent an increase of $3.15 per month (2.87 %) for the average residential customer using 750 kWh per month.  Even with this increase, Danvers Electric’s rates remain roughly one-third lower than the average electric customer in Massachusetts.

The rates for Danvers Electric are set to cover our costs and not to generate excess revenue or profit.  Current regulations require Danvers Electric to return any excess fuel costs collected during the following year to the customers.  This return of funds is included in the rate calculation each year.

In accordance with the approved Danvers Electric Rate Policy, the Municipal Light Board reviews the fuel charge each month by comparing costs and revenues to projections.  Halfway through the year, in June, full rate calculations and projections are performed to look at the year-end forecast.  A mid-year rate adjustment is considered at that point if necessary.

If you have further questions regarding Danvers Electric or your electric rates, please visit our website or call 978-774-0005.

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