National Grid is reducing electricity cost for its customers in Massachusetts in this spring and summer, starting from 1 May.

If the new supply rates are approved by the Massachusetts Department of Public Utilities (DPU), a typical residential customer using 500 kWh of electricity who receives Basic Service would see an electric bill that is approximately 23 percent lower than their current bill – or a $25 savings.

The electricity supply price will be approximately eight cents per kilowatt hour, a drop from the current 13 cents per kWh that is in effect until April 30.

"As we emerge again from winter, a season that consistently brings us higher energy prices, we are pleased that our customers can look forward to lower bills," said Marcy Reed, president of National Grid in Massachusetts. "We are committed to pursuing solutions that help stabilize energy costs for our customers, regardless of the season."

While the decrease in energy costs is good news for customers, as an electricity distribution company, National Grid doesn’t control the cost of generating electricity. National Grid does not make money on the electricity it purchases on behalf of customers; the cost of the commodity is passed through to customers without mark up. The new rates account only for this commodity or energy supply portion of the bill.

National Grid, however, is concerned about the impact these costs have on customers all year long and is here to help customers manage these costs and advocate for long-term energy solutions for the region. New England has been dealing with pipeline infrastructure constraints, which limit the amount of natural gas available for electricity generation. At the same time, there is a need for cleaner and more reliable energy. A balanced approach of advancing renewables, increasing energy efficiency, and increasing gas transmission and pipeline capacity is the company’s solution to helping solve this unprecedented challenge.

Electric Rates

Beginning May 1, the Basic Service charge, found in the supply services portion of the bill, could drop from the current rate of more than 13 cents per kWh to just above 8 cents per kWh, a decrease of about 38 percent.

The decrease is primarily attributable to fluctuations in wholesale electricity market prices, costs that National Grid does not control. National Grid does not generate electricity and plays no role in determining market prices; the company delivers electricity to customers’ homes and businesses.

While customers will see a significant decrease in the overall bill this season, supply prices are still high overall. This is due to higher wholesale electric prices in New England brought on by natural gas interstate pipeline constraints impacting the region.

New Englanders should be advised that though these power supply costs generally reflect a reduction in bills for the summer months, bills are likely to increase again next winter because of ongoing pipeline capacity constraints.