Need a good reason to switch energy suppliers? Electricity in Massachusetts is deregulated, so you have the opportunity to find a more competitive electric rate to save money. Massachusetts residents have saved up to 47% on energy bills by switching suppliers. In Massachusetts, did you know you can choose your electricity supplier? Over 500,000 Massachusetts residents have already switched energy suppliers. By making your own choice you can now dictate what service you get while always getting the same reliable utility services.
The year 1998 is synonymous with electricity choice for Massachusetts residents. In March of that year, consumers were given the option of purchasing their electricity services from their current utility company or choosing a third-party competitive energy supplier that’s right for their family and home.
The movement toward a deregulated electricity market in Massachusetts began two years prior when three utility companies in the state received permission to begin pilot programs offering energy choice. These utilities were NSTAR, – a combination of Boston Edison, Commonwealth Edison and Cambridge Edison – Mass Electric, and Western Mass Electric.
The pilot program showed promise, and, in 1997, Massachusetts created competitive supply by passing the Massachusetts Electric Industry Restarting Act. The Restructuring Act, as it is commonly called, stated that, beginning in March of 1998, all Massachusetts electricity consumers would have the choice to purchase their electricity from their current distributor (utility company) or to purchase energy from a third-party competitive energy supplier. Consumers who did not actively make a choice either way would draw basic service through their local distributor.
While The Restructuring Act opened the doorway for consumer choice in the Massachusetts electricity market, it did not deregulate the market’s transmission, distribution, or customer service markets. Companies in those markets still enjoy monopolies and do business exclusively with the customers located in their service area. These local distributors are still tasked with the physical billing for energy services as well. This means customers still get their monthly energy bill from their local utility, even if they have opted to purchase electricity services through a third-party competitive supplier.
With The Restructuring Act, the Massachusetts Legislature sought to infuse the market with lower consumer rates, provide a reliable, sustainable source of energy, and encourage efficiency among the utility companies by promoting and creating additional energy capacity.
The act worked. Massachusetts citizens enjoyed a 10 percent reduction in their energy costs during the first year, and a five percent reduction in year two. At the same time, Massachusetts has been fortunate to avoid many of the deregulation pitfalls witnessed in California.
For example, instead of capping electricity rates – as is done in California – Massachusetts legislators and regulators opted for cost-of-energy adjustments. This allowed Massachusetts electricity providers to adjust rates in response to market conditions, keeping the state’s electricity market viable for everyone.
Today, the deregulated electricity market is better than ever, as nearly two decades of competition have created new innovations, expanded eco-friendly options, and increased price protection for the citizens of Massachusetts. With more companies looking to enter the market all the time, Massachusetts customers can afford to be excited about the opportunities waiting for them in the years ahead.