Why Your Electric Bill is Going Up

Concord Municipal Light Plant customers will see about a 2.5 percent increase in their electric bills starting this month. The increase, noted on bills as the “Rate Stabilization Fund” will help offset the significantly higher wholesale capacity charges anticipated in a few years.

For more explanation on the increase, here’s a portion of the notice from CMLP announcing the change:

Concord Light purchases all of its electricity needs in the wholesale market. This electricity has two major cost components; the cost to generate the electricity and the cost to transmit the electricity to Concord. A component of the cost to generate electricity is defined as a capacity or fixed charge. From now through June 1, 2016, the price for capacity will average about $3.20 per kilowatt but then the price will jump to $9.50 for the next twelve months. This will result in a capacity cost increase to Concord Light of about $2.5 million for the year, which is the reason for the rate increase. The hope is that this will just be a one-year increase after which prices will drop back to where they are currently.

If we wait until June 1, 2016, then the increase in electric rates will be in the order of 10 percent for the year or we can start putting the funds aside now at a smaller increase to meet this cost obligation. We hope you will agree that given this set of circumstances, which are beyond Concord Light’s control, the more prudent approach is to start putting the funds away now so as to help offset a significant increase on June 1, 2016.