Merrimac Light Department 15% Rate Increase Effective November 1st, 2022

I am writing to you on behalf of the Merrimac Municipal Light Department, to inform you that, primarily due to increasing energy costs, we are increasing electric rates by 15%. You may have seen the headlines in the news regarding Eversource and National Grid and their rate increases.

Merrimac Light Department rates remain substantially lower than National Grid

I briefly would like to walk you through the costs associated with the delivery of electricity, so you fully understand why your cost of electricity is increasing. Your electric bill is divided into three parts: the cost of energy, the cost of delivery (the physical transmission and distribution of energy), and the cost of managing these services (the work we do at Merrimac Light is to ensure reliable electric service is provided to everyone).

The cost of energy is the actual generation cost associated with producing electricity, either through wind, solar, hydro, nuclear, natural gas generated or other resources. Merrimac Light has endeavored to keep these costs steady through electric generation portfolio management planning and engaging in long term power purchase agreements — at the same time we are moving toward securing cleaner/greener energy resources. Massachusetts which is part of New England ISO (independent system operator) main source for power generation is natural gas. Natural gas prices are increasing at a higher rate than inflation. For this winter we are seeing an unprecedented increase in energy generation costs greater than 20%.

The second cost is transmission. Transmission costs overall have increased by 13% during the past 5 years. These transmission costs are regulated at the state, regional and federal levels. Merrimac Light department, along with other municipal light departments, monitors and advocates at the state, regional and federal levels to keep these costs as reasonable as possible.

Finally, the cost of service, which is the cost to run the Merrimac Light Department. These costs have stayed consistent and is the reason that we were able to provide you with a rate reduction last year of 5%. Due to the recent increase in costs that I have mentioned, however, I regret to inform you that as of November 1, 2022, we will have to cancel the 5% rate reduction from last year and in addition add 10% higher energy costs for a total rate increase of 15%.

The average monthly electricity usage for a Merrimac Light department customer is 702.28 kWh and the average monthly bill $66.86. Therefore, the average monthly increase per bill will be approximately $10.00.

We are continuing to explore ways to keep the cost of electricity reasonable by seeking every efficiency we can find. As you may know, we encourage rate payers to go paperless and to sign up for autopay. Going paperless will have a $2.00 savings per customer each billing cycle. The auto pay system will save another $1.00 per household. By opting to utilize both services it will result in monthly savings.

Being a part of a municipal light department has several advantages, such as quicker response time, personal customers service, and lower energy costs than for profit utilities.

In closing, this will be the first rate increase during the last eight years. Merrimac Light Department knows how difficult this is for our customers. Therefore, we have decreased the burden by utilizing funds in our rate stabilization account to keep the increase as low as possible. Through our efforts of addressing inefficiencies, hedging our power needs, and finding ways to reduce our energy usage, we will be able to maintain same level of high-quality services.

We want to thank you in advance for your understanding. If you would like more information and learn how to save on your electric bill, please join us for a public education forum on November 16th at 6:00 PM to 7:00 PM at the police station community room.

As always, please feel free to stop by, call the office at 978-346-8311, or send an email regarding your experience with Merrimac Light service. Please follow us on Facebook and visit us at www.merrimaclight.com

Sincerely,
Mary Usovicz
General Manager
978-346-8311
musovicz@merrimaclight.com