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	Why are electricity prices rising?
	Customers all across New England and the country are feeling the impacts of rising energy costs – regardless of how they heat their home. With electricity now purchased on the marketplace just like other commodities, factors such as the war in Iraq, threats of terrorism or demand, all impact the price. Here in the region, most of the electricity you need to power your life is generated by plants fueled by natural gas. As these fuel prices rise, it costs more to generate the electricity you use and thus, the cost of the commodity (electricity) costs more. While WMECO makes every effort to mitigate the impact to you, we do not control the cost of the commodity – only the cost to deliver it to you. Think of us as the UPS of the industry. We control the cost of delivering the package to you but not the cost of the package itself.
	What are you doing to keep my costs down?
	We purchase electricity through a competitive bid solicitation in order to obtain the lowest price electricity, and we pass on to you only the price we pay. In addition, we purchase electricity through these competitive bid solicitations for different lengths of time in order to minimize the price changes you experience. WMECO also makes every effort to control our own internal costs and improve our productivity to keep our costs fair and reasonable.
	Are prices going to continue to climb?
	We do not control what happens on the open market, nor can we predict what may impact the market over the coming months and how the market will react. However, we encourage customers to make every attempt to reduce their usage and minimize their costs. Visit our Tips to Reduce Costs section for no-cost/low-cost ways to save energy and money and take advantage of the energy-efficiency programs we offer. You can also enroll in our Budget Billing to level your payments throughout the year. WMECO also encourages you to review your supplier options. While a supplier may not be able to offer you a better price, they may be able to offer you a longer term contract to help you better manage your budget.
	How much of my bill is for generation?
	Approximately two-thirds of your bill pays for the cost to generate the electricity you use. The cost is collected by WMECO and passed on to third-party providers.
	Why is my bill higher than my neighbor's?
	While the size of your homes may be the same, the appliances you use, how often you use them, the number of members of your household, their work patterns and your lifestyle all influence the amount of energy you use and impact your monthly bill. As well, the structure of your home, including insulation, floor covering and windows, all impact the energy efficiency of your home, how hard your heating and cooling systems need to work to maintain your personal comfort, and ultimately how much you pay each month. Check out our "Appliance Operating Costs" brochure for information about the cost of using common household appliances. In addition, rate classes vary by customer. For example, your neighbor may be receiving fuel assistance and is eligible for our discount rate.
	Are other utilities facing the same increases?
	Other utilities across New England are facing increasing fuel charges. Whether you heat with oil, propane, natural gas or electricity, you can expect to pay more this year.
	What is the water heating rate?
	We offer monthly credits to our residential customers who are willing to allow WMECO to control when their water heater operates. These credits based on your energy usage each month and applied directly to your bill. The tariff details the credits available, as well as the requirements needed to be eligible for the water heating rate.
	How much will I save on the Residential Discount Rate?
	The Residential Discount Rate for income-eligible customers reduces the cost of the monthly customer charge. Those savings depend on whether or not electricity is the primary energy you use to heat your home. As well, the Rate reduces your per-kilowatt-hour charges so your savings will depend on how much electricity you use each month. However, an average customer can expect to save approximately 20%.
	Am I eligible for the Residential Discount Rate?
	To be eligible, your WMECO account must be in your name and your income must be at or below 60% of the estimated state median income. You may also be eligible if you receive state or federal assistance. Visit our Residential Discount Rate eligibility page for all the details.
	How do we buy electricity for customers?
	For those customers who have opted not to purchase through a competitive supplier, we purchase Basic Service electricity on their behalf through a competitive bid process. For large business customers, we purchase power four times a year and buy 100 percent of supply they need in each purchase. For residential, small business and street lighting customers, we go to the market every six months and purchase 50 percent of the supply needed for the next 12 months. Thus 100 percent of the supply is obtained for six months from a combination of two purchases. WMECO notifies all companies that are members of NEPOOL (and, thus, all the potential suppliers) of our supply needs. The suppliers then provide bids back to WMECO with supply prices broken out on a monthly basis. We evaluate the bids and select the winning bid(s) for each customer class based on the lowest cost. This cost is then passed on to our customers.
	Why are electricity prices so volatile?
	Prices for electricity supply can change dramatically because they are closely tied to the price of natural gas. As well, in Massachusetts, supplies are obtained from only two purchases and no more than a year in advance so there is little blending of prices obtained at many different times. Massachusetts law and DPU instructions establish the timing and amounts of power that WMECO (and all other public utilities) can obtain at any time, and WMECO establishes the best terms and conditions possible to obtain the lowest prices from suppliers.
	How has the rising cost of natural gas impacted electricity rates?
	Natural gas is used to generate more than half of the electricity WMECO delivers to its customers. The cost of natural gas has more than doubled due to increased demand, as well as the impact of hurricanes Rita and Katrina on processing plants. As a result, the cost of generating electricity is sharply higher, as well.
	Can we get a yearly rate?
	The only way we could get a yearly rate is if the DPU changed its regulations. However, the purpose of purchasing supply more frequently and for shorter periods of time was to more closely align electricity prices with the actual price on the market and to encourage customers to switch to competitive suppliers. If the DPU did change its regulations, customers might see less volatile prices but they would be less reflective of current prices. It could be that, depending on the timing, customers could be paying higher prices than what is on the market. The current plan acts as a hedge against rapidly changing prices.
	How often does the supply rate change? And why?
	Supply rates for residential, small business and street lighting customer change twice a year. Large business supply rates change four times a year. The DPU requires all non-municipal utilities to follow this schedule. While the regulations provide us with little flexibility, we do attempt to time our purchases and draft our contracts so that suppliers can provide us with the best prices possible.
	Why does the supply rate change so often?
	The supply rate for the large customers changes quarterly to better reflect the price on the competitive market. While it may mean more price volatility, that volatility encourages customers to more actively seek competitive supply. The supply rate for small customers changes less frequently to provide some price stability while still being sensitive to the current market price of energy.
	How do suppliers base their bids?
	Suppliers set their bid prices based on natural gas because in New England, gas-fired power plants are typically the most expensive units to operate and, under ISO New England rules, the highest-cost plant sets the market price that all suppliers receive for their services. Supply and demand, and weather disruptions, such as Hurricanes Katrina and Rita, threats of terrorism and other external factors, all impact the cost of fuel, which impacts the price suppliers will bid.