Ratepayers to pay surcharge as Marblehead Light Commission joins state trust

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Marblehead Municipal Light Commissioners Mike Hull and Jean-Jacque Yarmoff worked from the same figures Tuesday. Sixteen years of a charge of just over $51,000 a year comes to about $816,000. Hull saw that total as money the Marblehead Municipal Light Department could hand the town itself. Yarmoff saw it as the price of admission.

The Light Commission sided with Yarmoff and voted to join the Renewable Energy Trust Fund run by the Massachusetts Clean Energy Center (MassCEC). Membership means every customer pays $0.0005 per kilowatt-hour, or 50 cents for every 1,000 kilowatt-hours used. At 2025 sales, that is just over $51,000 a year systemwide. The Independent calculated Sept. 25 that it is about $4 a year for the average home, using 2024 sales data. Membership is the last local condition for Marblehead's Green Communities application, which the town plans to file this year. The commission left its Sept. 1 meeting without a vote.

Hull: Keep the money home

Hull began with what the department has already done on its own. A 2019 plan, the Strategic Electrification Energy Plan, set money aside, and the department used it to buy the town an electric vehicle and put chargers around Marblehead.

"I just don't understand why we want to be under the thumb of the state when we can fund this on our own," Hull said.

His alternative was a department-run version of the trust fund. The department already sends the town $360,000 a year from excess funds, and Hull proposed carving out a guaranteed $100,000 or $200,000 a year for town energy projects.

"No worry about having to pay it back, with no worry about waiting for the grant to be paid, and we keep it in town," Hull said.

He also questioned how fast grants arrive. A two-year project, he said, means two years of paying in without applying for anything new. A program of the department's own could be changed at any time, he said, while a state program could raise its charge.

"What happens to the ratepayers then?" Hull asked.

He said only seven municipal light plants belong to the fund. Yarmoff said more do, most through an investor-owned utility that also serves their customers, and that 10 have signed direct agreements with MassCEC.

'This is autarky'

Yarmoff's case started with Swampscott. The neighboring town has won more than $1.5 million in grants since 2010, he said, sometimes applying yearly. Its usual rhythm was a year to prepare an application and two to carry out a grant. Set against 16 years of Marblehead's charge, a similar record would leave the town about $700,000 ahead.

He then applied an 8 percent annual discount rate. That shrinks each future year's dollars by 8 percent to reflect today's interest rates, and Yarmoff said it fit them. It cuts the gain to about $400,000.

The commission's new chair, Matthew Harrington, argued from the same ledger. By his math, $50,000 a year could bring back roughly twice that in grants, and grants run larger than a set annual check.

"We're not a bank," he said.

Yarmoff answered Hull's self-funding idea with a jab.

"This is autarky," Yarmoff said, asking why the department wouldn't also pay for the schools itself.

Yarmoff said the department already contributes to the trust fund indirectly. Power purchased through the regional grid includes costs tied to the Regional Greenhouse Gas Initiative, he said, which helps finance the fund, but nonmembers cannot draw from it. He listed grants the department has been shut out of, among them battery storage, electric vehicle charging and vehicle-to-grid projects. The contract appendix lists awards in the hundreds of thousands of dollars and potentially millions.

"He could not have accessed those because we didn't vote to participate in this," Yarmoff said of General Manager Jon Blair, whom the commission had asked to look for grants.

Yarmoff also argued that town projects would lower the department's own costs. Peak demand, he said, is climbing steeply and drives both capacity and transmission charges and the cost of building distribution lines for heavier loads. The town is the department's largest customer, and better-insulated town buildings would lower its peak. At the 20 percent energy reduction the town's Energy Reduction Plan calls for after five years, he estimated savings on capacity and transmission would run about three times the annual charge. Among the plan's projects, about $170,600 in controls, lighting and plug-load work at Brown School is projected to save $26,100 a year, The Independent reported Sept. 25.

The exit clause

Yarmoff said membership is meant to be permanent. A future board could withdraw, but it would have to repay any trust-fund awards the department had received. He put the maximum exposure at about $500,000, or 10 years of the charge, and called the risk "limited and hypothetical." The department has received no such awards, so it owes nothing today. Existing MassCEC grants, including a federal subgrant of more than $1 million and a geothermal project, would not be affected. Green Communities grants come from a separate source.

Blair ran Ipswich's light department when that town joined the fund in 2019. In a Sept. 11 email reported by The Independent, he wrote that Ipswich stood at a net loss of $70,000 when he left in 2023. Ipswich pays roughly $55,000 a year and won grants of $167,000 in 2024 and $500,000 in 2025; state records also list $200,000 in 2021. The program only makes sense, Blair wrote, with "perpetual pursuit of grant funding."

Hull, before leaving, said he saw how the vote would go.

"I know it was going to be four to one," he said, and urged the commission to vote.

No one else spoke. "Seems like a no-brainer," Commissioner Simon Frechette said. Yarmoff's motion also directs Blair to sign the membership agreement and add the charge to customer bills. It passed.

Winter discount: flat or tiered

Hull had left by the time commissioners took up winter rates. Blair presented two options for residential customers in December, January and February.

The flat option took 2 cents off every kilowatt-hour, from 18.95 cents to 16.95 cents, at a cost of about $378,000 in revenue. The tiered option takes 1 cent off the first 500 kilowatt-hours a month and 3.5 cents off every kilowatt-hour beyond that, at a cost of just under $410,000. For a household using the town average of about 660 kilowatt-hours a month, the tiered option saves about $10.60 a month and the flat option $13.20, by The Independent's arithmetic. The tiered option saves more above about 833 kilowatt-hours.

Blair said doing nothing was the safest choice. If the commission wanted to act, he preferred the tiered option, because the flat discount "doesn't really direct it in any meaningful way."

"Seems like a wasted opportunity," Blair said.

He proposed covering the gap with a one-time drop of about $400,000 in transmission charges, after a regulated recalculation of National Grid's costs for equipment serving only Marblehead. Customers paid those charges, he said, so the money should go back to them. Because the windfall does not repeat, the discount is for one winter, and Blair said he wants data on whether lower prices grow winter sales.

"Someone's not going to buy a heat pump for one year," Blair said.

Yarmoff said everyone paid into the windfall and everyone should share it, which is why he opposed a design giving nothing on the first 1,000 kilowatt-hours. He moved the tiered option, and it passed. Commissioner Kathleen Waslov said she uses about 1,650 kilowatt-hours a month and figured the discount would save her $45 a month, against about $4 a year for the trust-fund charge.

Hearing next

State law requires a public hearing on rate changes. The commission tentatively set one for 6 p.m. Oct. 14, covering the trust-fund charge, the winter discount and a higher surcharge for customers who opted out of smart meters. Blair said he would recommend reaffirming the trust-fund vote there. MassCEC wants to confirm the commission's authority to set the charge before the agreement is signed. The next regular meeting is Oct. 27. After the winter-rate vote, the commission went into executive session to discuss negotiations with nonunion personnel, litigation strategy and confidential business information, and did not return to open session.

The charge still needs that hearing and a signed agreement. The $700,000 and the guaranteed check are both projections. The department has received no trust-fund award, Yarmoff said, so it owes nothing and has been paid nothing.

Nobody asked the Light Commission to explain a charge of $0.0005 per kilowatt-hour, what happens if a future board backs out or why the estimates kept changing. Independent readers who chip in pay for the reporting that did. That means sitting through the meeting, reading the state contract and following an eight-year decision to its vote. Membership keeps that work free for every Marblehead resident. Become an Independent member.