Electricity Delivery Services

Delivery Services

When buying a kilowatt-hour of electricity, consumers pay for its delivery over the power grid to their electric meter, as well as for its generation by a power plant or other facility. Delivery and generation services each account for roughly 50% of an electric bill.

Distribution companies—NStar and National Grid (formerly Nantucket Electric)—retain their localized monopolies on power delivery services. Click on the links below for more information:

Delivery Services & Charges
NStar Delivery Service
National Grid Delivery Service

For more information on power generation services, visit the Power Supply Services and Tips for Choosing a Power Supplier pages.

Delivery Services & Charges
NStar’s service territory includes Cape Cod and Martha’s Vineyard, while National Grid delivers power to consumers on Nantucket. These companies own, operate, and maintain transmission and distribution (T&D) lines, substations, and other equipment, and they restore service in the event of an outage. They also own and read the meters that record electricity use by residential, municipal, commercial, and industrial customers.

The Cape & Islands T&D grid is sized to serve a population that booms in the summer. Consumers bear the economic burden of oversized power delivery infrastructure year-round. The Massachusetts Department of Public Utilities (DPU) regulates the rates that may be charged for delivery services to individual customer classes.

Delivery Service Charges
The delivery services portion of an electricity bill includes several charges that vary depending on the type of consumer and the number of kilowatt-hours consumed. It also includes a fixed customer service charge, which covers costs for metering, billing, and account maintenance. All consumers are subject to the following consumption-based charges:

Transmission: covers the cost of delivering electricity over high-voltage power lines into the distribution company’s service territory. This rate, regulated by DPU, varies by distribution company.
Distribution: covers the cost of delivering electricity to the customer’s meter over lower-voltage power lines within the distribution company’s service territory. This rate, regulated by DPU, varies by distribution company.
Transition: covers “stranded costs,” which are previous investments in power plants, power contracts, and other areas that were approved by state authorities but cannot be fully recovered in the competitive market. This rate, regulated by DPU, varies by distribution company. It is supposed to decline over time as previous investments are paid off, but that has not proven to be the case.
Energy Conservation: provides funding for efficiency programs managed by National Grid on behalf of Nantucket ratepayers and efficiency programs managed by the Cape Light Compact on behalf of Cape Cod and Martha’s Vineyard ratepayers. This rate, currently $0.0025/kWh, was set by the Electric Utility Restructuring Act of 1997.
Renewable Energy: generates revenue for the Massachusetts Renewable Energy Trust Fund, which provides funding to increase the production of renewable energy in the state and elsewhere in New England. The trust fund is managed by the Massachusetts Technology Collaborative on behalf of all ratepayers in the state. This rate, currently $0.0005/kWh, was set by the Electric Utility Restructuring Act of 1997.

For large customers, bills for delivery services include another consumption-based fee:

Demand: covers the cost of having adequate delivery capacity to meet the needs of every customer at all times. It is based on the highest recorded (peak) consumption in kilowatts within a billing cycle, not the total consumption in kilowatt-hours during the cycle. This rate, regulated by DPU, varies by distribution company.

NStar Delivery Service
Rates for delivery services on Cape Cod and Martha’s Vineyard are higher than those in many areas of Massachusetts. NStar’s website provides detailed information on delivery service rates for its residential customers and business customers.

National Grid Delivery Service
Rates for delivery services on Nantucket are the highest in the state. In addition to the charges detailed above, consumers are subject to a consumption-based cable facilities surcharge that covers the cost of the two underground and undersea transmission lines linking the island to Cape Cod.

National Grid's website provides detailed information on current delivery service rates for its residential customers and business customers. It also highlights the company’s undersea cable development projects.

Last updated 09.05.07