Below is information from the Reading Municipal Light Department:
READING, MA — In March 2021, Massachusetts passed comprehensive climate legislation, An Act Creating a Next Generation Roadmap for Massachusetts Climate Policy (Climate Bill), which for the first time establishes compliance standards for Municipal Light Plants (MLPs). This legislation requires that the power sold by MLPs be sourced from resources that are 50% non-carbon by 2030, 75% non-carbon by 2040, and net-zero carbon by 2050.
In addition to making electricity generation net-zero carbon by 2050, the Climate Bill also aims to reduce emissions in the building and transportation sectors by shifting these uses away from fossil fuels and towards electricity – this concept is known as electrification. Increasing electrification will increase electricity usage (load).
While positive for our community and our future, the Climate Bill will impact RMLD’s rates in a number of ways:
- Distribution Energy Network System costs will increase as the RMLD upgrades the local distribution system (wires, poles, transformers, etc.) to ensure it is equipped to handle higher electricity loads as customers electrify their homes and businesses.
- The Efficiency Electrification Charge (formerly Energy Conservation Charge) will increase in January 2022 to support customers as they increase efficiency and electrification in their homes and businesses.
- Wholesale FUEL Power Supply costs will increase as RMLD’s power supply portfolio shifts increasingly to non-carbon. Non-carbon generation sources are more expensive than carbon generation sources (currently, natural gas fueled generation is the majority of generation in New England). RMLD works diligently to keep costs down by actively managing its power supply portfolio.
- Wholesale CAPACITY AND TRANSMISSION Power Supply costs are calculated as the product of RMLD peak loads and regional market prices. RMLD has programs for peak demand reduction including Shred the Peak. The regional transmission rates are increasing to support upgrades and new construction of transmission lines to compensate for the closure of local carbon generation plants. Capacity rates are governed by annual auctions and are expected to decrease through 2024 and increase beginning in 2025.
- As part of RMLD’s Policy 30 that was updated in spring 2021 to accommodate compliance with the Climate Bill, RMLD is adding a Renewable Choice option for ratepayers to increase their participation in retiring more certificates than the annual compliance level. Renewable Choice is an opt-in program, hence, customers will need to contact RMLD to participate. This opt-in program will be effective January 2022. More details will be published in the coming months.
Other Pending Potential Charges
- Green Communities is not an RMLD program. Green Communities is a Massachusetts program that provides grants, technical assistance, and local support from Regional Coordinators to help municipalities reduce energy use and costs by implementing clean energy projects in municipal buildings, facilities, and schools. If Green Communities is implemented by the Towns (Reading, Wilmington, North Reading, and Lynnfield Center), RMLD would simply be a program administrator to collect funds and forward those funds to the Massachusetts agency that manages the program.
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