In a world where the costs of everything seem to be skyrocketing, Marbleheaders will be happy to know that come January, most will be paying less on their monthly electric bills.
At a recent Municipal Light Department Board meeting, General Manager Joe Kowalik presented rate changes that will be coming in 2024. Despite an increase in the base rate from $11.25 to $18.50, the average resident will see a 9.1% decrease in their monthly bill.
“This will be good news for all residential customers because basically their bill will decrease,” Kowalik said. “The only question is going to be, how much will it decrease by?”
The average customer using 662 kilowatt hours per month will see a drop in their average monthly residential energy cost from $146.90 in January 2023 to $125.45 in January 2024. For light-use customers using 300 kWh, that cost will drop from $66.57 to $56.85. Heavy-use customers with a monthly average of 1,100 kWh will see that number go from $244.09 to $208.45.
Kowalik noted that these three categories make up 72% of MMLD’s customers.
The rate changes are a result of a study that looked into the department’s revenue and expenses, which was conducted nearly two years ago.
“What we learned is this imbalance, in terms of the imbalance in how we spend the money between variable and fixed expenses, and how we generate revenue between variable and fixed expenses,” Kowalik said.
In order to begin fixing the imbalance, the department is starting to bring the revenue in line with fixed expenses. In 2022, only 3% of revenue was being generated from base rates, while those base rates accounted for 35% of expenses. The base rates were subsequently changed in 2023, and accounted for 7% of revenue.
In 2024, it is expected that the base rates will make up 11% of revenue, which is an 8% increase in roughly two years.
“It means we’re going in the right direction, but we still have a ways to go,” Kowalik said.