On June 27, 2023, the Municipal Light Board discussed the electric rates for the remainder of 2023. During this discussion, the Board voted to lower the fuel charge (covers the cost for Danvers Electric to purchase electricity on the wholesale market and have it delivered (transmitted) to Danvers) from $0.065 to $0.054 per kWh for residential customers and $0.0719 to $0.060 per kWh for all other customers.
The average residential customer with a 750kWh monthly bill would see a 7.0% total reduction going from $118.95 down to $110.70. This decrease is due to the mild weather conditions we experienced in January and February, which significantly kept wholesale electricity rates low, leading to a surplus in the energy market. This stability in the electricity supply prevented price spikes which often occur during extreme weather conditions.
In addition to the mild weather conditions, Assistant Utility Director Clint Allen stated, “To further capitalize on the low wholesale electricity rates, Danvers Electric secured a short-term power purchase agreement with a regional supplier. This agreement allowed us to lock in favorable and below-budgeted pricing for the next couple of years and avoid unnecessary exposure to the volatile open market.”
The rates for Danvers Electric are established to cover our costs and not to generate excess revenue or profit. Current regulations require Danvers Electric to return any excess fuel costs collected the following year to the customers. This return of funds is included in the rate calculation from year to year.
If you have further questions regarding Danvers Electric or your electric rates, please visit our website https://www.danversma.gov/departments/electric-division/ or call 978-774-0005.