Peabody Light Hopes To Protect Customers From Skyrocketing Rates

PEABODY, MA — When the Peabody Municipal Light Plant announced a 9 percent rate increase in June it was met with consternation from many customers who had enjoyed relatively level prices for the previous 12 years.

Now, with market powerhouses National Grid and Eversource proposing rate increases of up to 38 percent for residents across the state this winter, the hope at PMLP is that the relatively modest increase of the spring will be enough to sustain the extreme volatility in the global energy market.

"As a municipal utility, we are able to build in long-term rate stabilization modifiers so it allows us to give us a more of a normalized feel when there is a spike like this," PMLP General Manager Joe Anastasi told Patch on Thursday. "We temper our spikes because that is our primary goal to have our customers pay the lowest rates. That's why we exist."

Still, PMLP also has to pay the bills to cover its own costs, so that's why that while Anastasi said the desire is to weather the storm of conspiring factors that include the war in Ukraine, COVID-19-related natural gas production shortages, and lingering supply-side issues, Anastasi allowed "we are not completed shielded by the market."

"We are obviously trying not to (raise rates)," he told Patch. "We don't want to. There are a couple of market factors that have exploded recently in just the last couple of weeks."

One other factor, according to Anastasi, is that the push toward renewable energies such as solar and wind — and becoming carbon-neutral by 2050 under state law — does come with very high upfront costs that hopefully are ultimately rewarded with lower long-term rates as well as a better environment.

He said the utility will carefully analyze the changes to determine whether the added immediate costs can be absorbed without passing them on to customers.

"It is not going to be a knee-jerk reaction," he said. "But in order to provide the service we do, and make sure Peabody does not become another National Grid territory, we need to make our money back.

"It's a real thing. And we are dealing with it."

Anastasi said that PMLP increase of 9 percent was between four and seven times less than utilities such as National Grid, Eversource and Unitil have proposed for this winter.

(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. Twitter: @Scott_Souza.)