Like most of the population, you probably realize that your utility bills are going up, but probably have no idea by how much. Higher energy prices impact everyone. When a larger share of your paycheck goes to utility bills, that means that you have less funds available to pay for goods and services you need. Businesses are especially sensitive to energy costs. Electricity costs have contributed to the shutdown of several plants and loss of thousands of jobs in the state.
Electricity rates in Massachusetts have soared in the last decade, mostly due to the increased cost of natural gas. Massachusetts is especially dependent on natural gas costs because it powers over 40% of the region’s electricity. When the price of natural gases rises, it directly affects electric rates. Although the price of natural gas has varied in the recent past, the long-term forecast is for high prices. Other factors affecting costs here are growing demand, insufficient supply, and inadequate transmission, which produce bottlenecks that additionally hinder supply.
Currently, Massachusetts has the fourth most expensive electricity based on a study done by the Small Business and Entrepreneurship Council. The state’s residents are paying between 16 and 20 cents for electricity and rates are supposed to continue to increase. Residential electricity costs in Massachusetts have doubled since 1990, with a majority of the increase happening after 2004. Other regions in the country have not been impacted as intensely because electricity generation isn’t tied to natural gas. This is a good indicator that Massachusetts needs better diversification of their energy portfolio to avoid rate increases. Investment in renewable energy choices, such as wind and solar, are a smart choice for the state and for residents who want to avoid spikes in energy prices.
Another reason why Massachusetts consumers are paying more for electricity is because they are using more. An increase in the variety of electronic devices has directly impacted resident’s bills. Ten years ago, few households had home computers, cell-phone chargers, DVD players or PlayStations. Even though most appliances these days are much more energy-efficient than in the past and people are more conscientious about turning off lights, the best way to pay less for your electricity bill is to start cutting usage.