Delivery Service Providers
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:
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
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