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The Marblehead Municipal Light Department will not raise electric rates in 2026 despite rising wholesale power costs, and commissioners also voted this week to formally define how — and whether — the utility makes voluntary payments to the town.
General Manager Jonathan Blair said the department’s proposed budget is designed to hold rates steady while maintaining financial stability.
The typical household using 750 kilowatt-hours a month pays about $158, compared with $264 for National Grid and $257 for Eversource, the investor-owned utilities that serve most of Massachusetts.
The department’s customer base is predominantly residential, with 73% of power sales going to homes and 11% to large commercial users. That limits the ability to spread fixed costs across high-volume industrial customers and places greater emphasis on careful financial management.
Blair said wholesale power, labor and benefits account for more than 80% of the department’s annual expenses, leaving little room for discretionary cuts. For perspective, the department‘s budget stands at around $21.24 million operating budget
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Commission adopts formal policy on town payments
Commissioners unanimously approved a written policy governing voluntary payments to the town of Marblehead.
As a municipal utility, the light department does not pay property taxes. Instead, it has historically made discretionary transfers from surplus funds to the town, a practice that dates back at least to 2006.
Under the new policy, payments will be calculated using a formula tied to electricity sales in the prior year, set at $3.60 per megawatt-hour, with a minimum payment of $360,000 unless the commission votes otherwise. The policy also makes explicit that payments remain voluntary and may be reduced or suspended based on financial conditions.
Commission Chairman Jean-Jacques Yarmoff said the policy is intended to clarify that no payment is guaranteed.
Town documents researched and reviewed by The Marblehead Independent show the light department transferred $330,000 annually from 2006 through 2024, totaling $6.27 million. An additional $22,294 transfer in 2020 for a strategic electrification fund brings the documented total to $6,292,294.
The policy does not change the amount of recent payments but replaces a long-standing practice with a formal framework and clarifies that future transfers are subject to board discretion.
Enterprise funds such as the light department are typically expected to be self-supporting, with rates set to cover utility operations. Transfers to the General Fund reflect a decision to use ratepayer revenue beyond providing electric service.
Blair said four of Massachusetts’ 41 municipal light departments make no payments to their host communities, while Reading is required to do so under a special state law.
Customer satisfaction remains high
Commissioners also reviewed results from a customer survey conducted in October with the Municipal Electric Association of Massachusetts and Great Blue Research.
About 260 customers responded, with results skewed toward homeowners, empty nesters and households earning more than $200,000 annually.
Overall satisfaction with the Marblehead Municipal Light Department reached 89.7%, compared with 79.4% for Massachusetts public power utilities and 66.8% for investor-owned utilities. Customers gave particularly high marks for reliability, outage restoration and honesty.
Scores were closer to peer utilities in areas such as energy conservation assistance and innovative programs. Blair said the department will continue analyzing the data and will post the full survey report on its website.
Other actions and next steps
Commissioners approved writing off $93,447.81 in unpaid bills from inactive accounts, roughly double last year’s total, largely due to two high-balance cases involving a deceased customer and a defunct business.
The department recovered more than $1 million in overdue payments this year through a combination of in-house collections and an outside agency. Blair said staff are developing clearer enforcement policies to reduce discretion.
The department also announced a two-phase strategic planning process in early 2026. A Jan. 22 workshop at Abbot Public Library will focus on short-term priorities for the next 18 to 24 months, followed by a Feb. 10 meeting to refine those priorities into a draft plan.
Both meetings are open to the public. Those planning to attend should email jjyarmoff@gmail.com to help with space planning.
