US Electric Rates

Do you ever wonder if you are paying more for electricity than let’s say, someone in Idaho? How about Florida or California? For anyone that has ever driven through multiple states, you probably noticed that gas prices fluctuate when you crossed the state lines. You figure gas in New York should be the same as MA, but due to taxes and perhaps other state regulations, it’s not.

Electricity is even more tricky. There are a variety of factors affecting electricity costs. Some include:

  • The generation type (nuclear, natural gas, hydro, solar, etc…) 
  • Age of power plants
  • Travel distance from generation to the load (how far away is that city from the source)
  • The age of transmission infrastructure  
  • The size and power ratings of the transmission infrastructure
  • The age and capacity ratings of the local distribution 

Plus, a whole other litany of reasons such as power lines above or underground, the availability of the power source (for example, in the winter natural gas rationing can cause electric prices to rise), as well as state regulations and taxes. 

When it’s all said and done, there are some states paying quadruple the costs of other states. Hawaii for example, has an average residential electric rate of $.32/kWh, where in Louisiana, folks are paying just $.08.

Massachusetts Electric Costs

So how does Massachusetts compare to the rest of the country? We pay $.22/kWh on average for household power. Compared to an isolated island in the middle of the Pacific Ocean, that’s not too bad, but compared to the rest of the continential US, it’s pretty bad.  According to the U.S. Energy Information Administration (EIA), the average price-per-kWh for household power in the US is $.12/kWh. That means MA residents pay 83% more for electricity than the average American. Yikes!

In fact, MA has the 3rd highest residential electric rates in the country, only after Hawaii and Rhode Island (we are the highest non-island State ‘Rhode Island’ – that’s a joke). And if you live on the Cape or the Islands (Nantucket or Martha’s Vineyard), then you are likely paying higher rates than the rest of us in MA.  The following is a US map of average residential electric rates:

Why are MA Electric Rates so High?

You’ll notice the power in the northeast is, on average, higher than the rest of the country. Why is that?  When I was an urban planner, we had a saying, “MA is the home to many firsts; the home of the Mayflower, the first public schools, the first subway… but that means we also have the oldest public schools and subways.” Please take that with a grain of salt, but you get the gist – our infrastructure is old. Have you ever noticed when a new subdivision is built there are no above ground power lines? Wonder why? Because power lines underground are protected. They will not be affected by winter nor’easters or summer thunderstorms and hurricanes. Now imagine how much it costs every time you drive by a utility worker fixing those above ground lines? And don’t forget about the policeman drinking Dunkin Donuts coffee being paid overtime (don’t get me wrong, I’d work as much overtime details too if I was a cop).

The Gas Gamble

Around the turn of the 21st century, there was a growing consensus that natural gas would be our electric grid’s savior. Afterall, as that train-of-thought went, nuclear is obviously bad and coal and diesel are evil, but natural gas, is clear and burns “clean.” So lets decommission all those nuclear power plants and either shutdown or convert the nasty coal power plants to natural gas. Then, all we have to do is build a simple little pipeline to metropolitan Boston and voila, all our problems would be solved!

Opps! That plan failed. Currently, there is no magic pipeline providing an unlimited supply of natural gas to Boston. However, we did decommission a series of nuclear power plants and convert a whole bunch of coal and diesel plants to natural gas. But without an unlimited supply, we literally have to ration natural gas in the winter. You see, natural gas is used and piped to homes for heating and cooking and power plants to generate electricity. So in the winter, the powers that be make the correct choice to steer the NG to the household pipeline. The utilities are then forced to turn to dirtier and more expensive means to produce power.

Oh Can-a-da!

I have an idea, since we don’t have the ability to generate enough electricity in MA, lets get it from one of our neighbors. Maybe New Hampshire or Maine. Nope, they don’t have it. Okay, how about New York or Connecticut? Nope, wrong again. It just so happens, none of our neighbors have copious amounts of extra electricity just sitting around. But guess who does – the Canadians!

Up there in Québec, our hockey playing neighbors have figured out how to harness the power of water (Yes, the US has the Hoover Dam and the Tampa Bay Lightning hockey team, but let’s not get caught up in semantics 😁). Hydro-Québec has been selling power to MA and its neighboring states for over 30 years. Even as we speak, Hydro-Québec and MA are working out a deal to increase transmission capacity, so the Canadians can send us even more power!

On one hand, preventing rolling brownouts and having a stable power grid is a very good thing. On the other hand, Hydro-Québec is shiesty, but can you blame them? One might think that since New Englanders are such loyal patrons, patrons willing to buy even more of their juicy electricity, we would get a killer deal. If you thought that, you are wrong. Sorry, this is business my friend, and Hydro-Québec is milking us for every penny. And don’t worry, it will only cost us about $950 million to build the planned transmission infrastructure to make us even more dependant on their “affordable” hydro-power. If you are thinking this is a bit absurd, you are not alone.

Other Reasons Why MA Has Such High Electric Costs

Not to bore you, but there are other reasons why MA has high electric costs. As previously stated, our power infrastructure is old – all of it! We are decommissioning power plants faster than we build new ones. Our power lines our old. Our substations are old.  My grandfather’s Oldsmobile is old – wait, is that part of the grid? Like I said above, everytime you see the utility truck on the side of the road and one of Boston’s finest sipping his or her latté, think to yourself, “that is also why my electric bill is so high.” Let’s face it, maintaining and updating our decrepit old gird is a costly matter.

Here is a question, who is running the light show? Good question and the answer is… a long list of state, quasi government agencies (with acronyms like NECEC, DOER, DPU, ISONE, MassCEC, etc..), the public utilities and at the end of the day – nobody! That’s right. You’d think there would be some master plan for our power grid, approved by municipal officials and our state legislature, that governs the growth, and not just growth, the Smart Growth of our grid, but nope, wrong again. Pretty much we have dozens of cooks in the kitchen, each with competing agendas and then we throw our hands in the air and can’t figure out why Massachusetts has the third highest electric bills in the nation. Yuck.

Will this Ever Change?

Sure it will. Anytime soon? (Can I sell you some nice land in Florida?) I’ve been in the industry for nearly a decade, and I was an urban planner dating back to the mid 2000’s. In all that time, I’ve never heard or read anything that gives me hope that electric prices will drop. In reality, for the foreseeable future MA electric rates will continue to increase.

But do I have hope? Yes, a lot in fact. And I mean that. Massachusetts has one of the most forward thinking technologically driven populouses in the world. If we can harness some of that energy and to work together to design a modern smart grid, with integrated energy storage and a flourishing renewable energy portfolio that is built for long term sustainability and resiliency, then I believe we can levelize the cost of power. I believe MA can be a world leader in power infrastructure, a model to both developing and modern societies. I am working for that dream, I am pushing for that vision, but just don’t hold your breath while I’m swinging for the fences.





Bookmark and Share
  • Comments Off on US Electric Rates

No comments so far.

No comments yet.

Sorry, the comment form is closed at this time.