As a follow-up to yesterday’s post — Wilmington Electric Bills Will Rise ‘Significantly’ Over Next Few Years, Says RMLD — the Reading Municipal Light Department discusses the role of “transmission costs” in rate increases.
READING, MA – In an ongoing effort to communicate to its customers about the projected rise in electricity costs over the next couple of years, Reading Municipal Light Department (RMLD) explains how transmission costs play a major role in the rising cost of electricity.
“Once electricity is produced at generating plants, it passes through a transformer that raises its voltage to as much as 345,000 volts for transmission. It flows through transmission lines, owned by investorowned utilities like National Grid and Eversource [formerly NSTAR] to RMLD substation transformers where the electrical current is stepped down,” said RMLD Integrated Resources Manager Jane Parenteau. “From the substation, RMLD distributes it into your neighborhood to a pole or ground transformer that steps it down once again to 120 volts. It then flows into your homes and businesses.”
In the early 2000s Independent System Operator – New England (ISO-NE) and the Federal Energy Regulatory Commission (FERC) offered incentives to transmission owners to upgrade and increase the capacity of their transmission systems. Subsequently, investor-owned utilities spent billions to expand and modernize their transmission systems. These costs are passed on to all electric consumers, including RMLD customers.
The transmission component of customers’ bills has increased dramatically over the last decade. RMLD’s transmission costs totaled approximately $3.25 million for 704 million kWh of electricity in 2006. By 2014, transmission costs more than tripled to over $10 million, while sales decreased to 688 million kWh.
This translates to customers using 750 kWh monthly and paying $3.50 for a transmission charge in 2006 are now paying a little over $11. And, these costs are projected to continue to rise through 2020.
RMLD’s Integrated Resources Department manages the capability and capacity of the electric system by targeting the reduction of customer peak demand, offering energy efficiency recommendations, rebates, demand response and behind-the-meter generation, which could include renewable energy and or traditional fossil fuel.
To build and maintain customer relations and share information on current issues and trends in the electric industry, RMLD will explain how capacity, energy and distribution costs impact your bill in the coming weeks.
(The above press release is from Reading Municipal Light Department.)
Wilmington Apple 
Why do Wilmington residents pay higher rates than the other towns serviced by RMLD?