massachusetts retail electric choice
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About ElectricityMatch
About Charlie HewittCharlie Hewitt has more than 20 years of in-depth energy experience having served in executive and managerial roles at some of the largest retail energy providers in North America. His expertise covers a wide range of retail energy disciplines including pricing, contracting, risk management, and credit. He holds an MBA from UT Arlington, MA and BS degrees in geology from UT Austin, and was a TXU environmental research fellow.
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The Massachusetts Electric Industry Restructuring Act of 1997 established the structure and framework for retail electric competition.
Beginning in March, 1998, Massachusetts residential, commercial, and industrial customers have had a choice of how they purchase their electric generation.
Retail electric customers can purchase their electric generation form a competitive supplier (CS) or their regulated electric distribution utility (LDC).
Electricity consumers remaining with the LDC receive default service under a tariff rate know as Basic Service.
Massachusetts retail electric choice only applies to investor-owned LDCs. Municipal electric and electric cooperative utilities are not subject to electric deregulation.
Massachusetts Electric Deregulation
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Massachusetts investor-owned utilities have undergone name changes that may be unfamiliar to some energy consumers.
Eversource Energy was formerly known as NSTAR. NSTAR included Boston Edison, Cambridge Electric and Commonwealth Electric. Eversource Energy refers to this LDC as its Eastern Massachusetts division.
Eversource Energy also includes Northeast Utilities which, in turn, was also commonly known as Western Massachusetts Electric Company. Eversource Energy refers to this LDC as its Western Massachusetts division.
National Grid includes the former Massachusetts Electric Company and the Nantucket Electric Company. Distinctions are still made if referring to service in Nantucket or the Massachusetts mainland.
Unitil is new name for the Fitchburg Gas & Electric Light Company.
Massachusetts Electric Utilities
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The majority of Massachusetts electric load is split between National Grid and Eversource Energy (eastern). The chart reflects load data from 2014.
Massachusetts LDC Load Distribution
National Grid; 46%
Eversource (NSTAR);
45%
Eversource (WMECo); 8% Unitil; 1%
Source: Massachusetts Department of Energy Resources
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Massachusetts residential customers have overwhelmingly chosen to remain on Basic Service with their distribution utility.
Residential Electricity Switching
National Grid Everource (NSTAR)
Eversource (WMECo)
Unitil0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Residential Load (kWh) Remaining with LDC
201220132014
Source: Massachusetts Department of Energy Resources
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Massachusetts small commercial and industrial customers (≤3000 kWh/month) have shown higher tendencies to switch to a competitive supplier, especially in the Eversource Energy service areas.
Small C&I Electric Supplier Switching
National Grid Everource (NSTAR)
Eversource (WMECo)
Unitil0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Small C&I Load (kWh) Remaining with LDC
201220132014
Source: Massachusetts Department of Energy Resources
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The majority of Massachusetts medium commercial and industrial customers (3,000 to 120,000 kWh/month) have switched from utility Basic Service to competitive electric suppliers.
Medium C&I Electric Supplier Switching
National Grid Everource (NSTAR)
Eversource (WMECo)
Unitil0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Medium C&I Load Remaining with LDC
201220132014
Source: Massachusetts Department of Energy Resources
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Almost all Massachusetts large commercial and industrial customers (>120,000 kWh/month) are served by competitive suppliers. However, there has been a small net migration back to utility supply in the past few years.
Large C&I Electric Supplier Switching
National Grid Everource (Nstar)
Eversource (WMECo)
Unitil0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Large C&I Load (kWh) Remaining with the LDC
201220132014
Source: Massachusetts Department of Energy Resources
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As shown in the previous graphs, the Massachusetts medium and large C&I customer segments are very competitive with high switching rates. The residential and small C&I markets are not nearly as competitive.
The Massachusetts DPU has moved forward with two initiatives that should bring more competition to the small customer market.
The final order establishing utility purchase of receivables (POR) was issued in March 2014. Eliminating the credit and collections risk through POR is key to encouraging competitive suppliers to market to residential and small C&I customers. Having an established POR discount rate may lead to lower electric rates.
In April 2015, the DPU also suspended the mandatory bill recalculation for customers switching their electric service from the utility to a competitive supplier. While the bill calculation was intended to discourage seasonal market gaming, it served as a barrier to customer switching. The impact of the DPU action will be realized over the next year, especially during winter months.
Energizing Customer Choice