Marblehead’s effort to become a state-designated Green Community cleared a key hurdle Tuesday night when the Municipal Light Board voted to join a state renewable energy fund, a step officials said is necessary for the town to complete its application.
The board also approved a new, temporary tiered electricity rate for residential customers this winter designed to lower bills while encouraging residents who heat with electricity to use more power during months when the Light Department has excess capacity.
Both rate changes are expected to be discussed at a public hearing tentatively scheduled for Oct. 14 at 6 p.m.
Green Community vote
The Green Community vote came after the Select Board unanimously supported pursuing the state designation in August. At the Light Board’s previous meeting, representatives from the town’s Community Development and Planning Department explained that participation in the Massachusetts Clean Energy Center’s Renewable Energy Trust Fund was the final condition Marblehead needed to satisfy before applying for Green Community status. The town hopes to submit its application by the end of the year.
Becoming a Green Community would make Marblehead eligible to seek state grants for energy-efficiency and clean-energy projects in municipal buildings.
During Monday’s discussion, board members pointed to neighboring Swampscott, which they said has received more than $1.5 million in Green Communities grants since 2010. Marblehead’s cost of participating in the Renewable Energy Trust Fund is estimated at slightly more than $51,000 a year, funded through a surcharge on electric customers. That surcharge would be approximately $4 a year.
Supporters argued that the potential benefits go beyond the grants themselves. Energy-efficiency work on town buildings could reduce municipal energy costs, while better insulation and other improvements could reduce peak electric demand — an important factor in what the Light Department pays for electricity and transmission.
The town is the Light Department’s largest customer, accounting for about 5% of its electric load, according to the presentation. Officials argued that improving municipal buildings could lower peak demand while electrification of heating and vehicles could increase electricity sales during times of the year when the system has room for additional use.
Joining the Renewable Energy Trust Fund would also make the Light Department itself eligible for MassCEC grants and rebates for projects such as battery storage, electric vehicle charging and vehicle-to-grid technology.
Although Marblehead already indirectly contributes to clean-energy programs through the power it purchases from the regional electric grid, MMLD has not been eligible for Renewable Energy Trust Fund grants because it is not a member, board members were told.
One concern raised during the discussion was that membership is intended to be permanent. If a future Light Board withdrew from the program, MMLD could be required to repay Renewable Energy Trust Fund grants it had received. Officials stressed that other grants the department has received from different state and federal funding sources would not be affected.
Light Board member Mike Hull opposed joining the state program, arguing that MMLD could instead keep the roughly $51,000 annual contribution in Marblehead and use local funds to finance energy projects without state requirements.
“We could keep the money in town,” Hull argued, suggesting MMLD could dedicate money each year directly to local projects rather than relying on grants.
Other board members countered that joining the program gives Marblehead an opportunity to leverage its contribution and potentially receive substantially more in grants than it pays into the fund.
“For 50 grand a year we can get double that,” one member said, pointing to Swampscott’s experience.
The board ultimately approved joining the Renewable Energy Trust Fund and directed the general manager to execute the membership agreement.
A new winter rate structure
The board then turned to a separate but related question: whether to lower residential electricity rates this winter.
General Manager Jon Blair presented three possibilities: keep rates unchanged; provide a flat 2-cent-per-kilowatt-hour discount to all residential customers; or introduce a tiered discount that gives a larger break to customers who use more electricity.
The board chose the tiered option.
For December 2026 and January and February 2027, residential customers would receive a 1-cent-per-kilowatt-hour discount on their first 500 kilowatt-hours of electricity each month. Electricity used above 500 kilowatt-hours would receive a 3.5-cent-per-kilowatt-hour discount. Savings per customer will range from $32-$135 annually.
Instead of charging customers more as they consume more electricity, MMLD would temporarily give its heaviest winter users the largest discount. Blair described it as a “declining block rate structure.”
The goal is to encourage residents who have electric heat — including heat pumps and electric baseboards — to rely more heavily on electricity rather than oil or gas during the winter.
“We’ve already identified winter as an off-peak season, and we’ve identified the fact that we have headroom that allows us to increase our sales,” Blair said.
MMLD estimates an average residential customer uses about 660 kilowatt-hours per month throughout the year. Under the tiered system, customers using considerably more than that — such as households heating with electricity — would see the biggest savings.
The discount is expected to reduce Light Department revenue by just under $410,000 over the three months.
MMLD can absorb that loss this winter because of an unexpected reduction of about $400,000 in transmission costs charged by National Grid. Blair characterized that as a one-time opportunity and said the money could be retained by the department, but noted that customers had effectively paid the higher transmission costs in previous years.
“We are owned by the customers we serve,” Blair said. “So they paid for that as a pass through. Then I think we can return it to them.”
The winter discount is not permanent. Instead, Blair described it partly as an experiment to see whether lower winter electricity prices change customers’ behavior and increase off-peak electric use.
Marblehead Light Commissioner Jean-Jacques Yarmoff told the Current, “I can guarantee that we will definitely look for other sources of financing, if we can, to continue giving residents the benefits of lower rates in the winter.”
If it works, the experience could help MMLD design more sophisticated seasonal or time-of-use rates once the department installs advanced meters that allow customers to track their electricity consumption more closely.
Blair said MMLD hopes to seek proposals for the new advanced metering system this fall, review bids around the beginning of the year and award a contract by late February. He said the department should be well positioned to have the system in place before summer 2028.
The board approved the tiered winter rate for December through February.
Yarmoff said any families that choose to opt-out of the rate reduction may do so and the savings will be invested in MMLD’s fund for customers in need, Neighbors Helping Neighbors.
Before either rate change takes effect, MMLD plans to hold the Oct. 14 public hearing. In addition to the Renewable Energy Trust Fund surcharge and winter residential discount, the hearing is expected to cover an increased charge for the small number of customers who have opted out of smart meters and require analog meters to be installed and read manually.
