The answer, explained general manager Glenn Trueira of the Peabody Municipal Light Plant, is in the complex system that municipal utility companies in particular have for buying fuel, a system designed to avoid the sudden price surges that occur due to market factors, or, at times, political influences. Also a factor is the variety of sources used to supply the power, electricity purchased off the open market.

"We have a lot of our power locked up in existing contracts," Trueira told the News, referring to deals made prior to the downhill run of fuel prices.

Oil is currently reported to be selling at below $28 per barrel after approaching $150 per barrel in some cases less than a decade ago. Measured in MMBtu, one million British thermal units, the price of Natural gas has gone from $10.78 in 2008 to $2.39 this January.

"We have a mix of resources that make up our power resources," said Trueira. "We want to have not only low Energy Rates. We want steady energy rates. We want to keep (prices) stable."

PMLP is a public, nonprofit utility, which serves all of Peabody and part of Lynnfield, and is led by an elected board of commissioners. It can produce its own electricity with two turbines, but much of its energy is generated elsewhere.

Trueira said the major power source on his palette — and the cheapest — is nuclear. Additionally, the utility uses green energy created through solar panels and wind, as well as power borne of natural gas and oil.

"In terms of oil, it's a pretty small part of our portfolio," he said, adding that the drop in price might be helpful, "but when you mix it in it doesn't have a big overall affect."

Natural gas is used more often, but natural gas prices in this part of the country are higher than almost anywhere else, he said. "There's only so much pipeline capacity."

Read the entire Salem News article here.