Massachusetts has long been a bellwether for energy policy. Decades before many other states began exploring retail choice, lawmakers and regulators here were already questioning whether vertically integrated monopolies could deliver the best outcomes for consumers and the environment. The Commonwealth’s decision to restructure the electricity and natural gas markets was driven by a desire to encourage competition, lower prices, foster innovation and accelerate the adoption of cleaner power sources. That experiment has shaped the landscape of energy procurement in every city and town, and it continues to evolve as new technologies and policy goals emerge.
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In the mid 1990s state officials concluded that competition in generation could benefit customers. The Legislature enacted the Electric Utility Restructuring Act of 1997 after the Department of Public Utilities issued a report calling for customer choice. The law ordered the eight investor owned electric companies serving about 87 percent of Massachusetts customers to separate their generation and distribution businesses. Retail access officially began in March of 1998. The legislation mandated an immediate ten percent reduction in rates for customers of those utilities, with an additional five percent reduction after eighteen months. It also required the utilities to divest most of their generation assets and recover any stranded costs through a transition charge.
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The restructuring act created several types of generation service. Standard offer service was designed as a transitional option for customers who did not choose a competitive supplier. Rates were initially set at about 2.8 cents per kilowatt hour, providing the promised ten percent rate reduction. The discount deepened to fifteen percent by September of 1999. The program continued until 2004, after which customers who had not chosen a competitive supplier were placed on basic service, sometimes called default service. Competitive generation service was available to any customer willing to shop for supply. The market also allowed for default service, which the utility procured from wholesale suppliers through competitive solicitations.
Adoption of retail electricity choice was gradual. During the early years standard offer rates were so low that few households or businesses had an incentive to switch. By the year two thousand there were thirty three licensed competitive suppliers and brokers operating in the state, but market share remained modest. Energy brokers served as agents connecting customers with licensed suppliers, helping them evaluate offers and navigate contracts without taking title to electricity themselves. Over time, as standard offer expired and wholesale prices fluctuated, more consumers considered competitive supply, particularly large commercial and industrial users seeking budget certainty.
Natural gas choice followed a similar trajectory. The Natural Gas Choice and Competition Act of 1999 authorized customers to choose their natural gas supplier while the local distribution company continued to deliver the fuel and maintain pipelines. The law opened the door for dozens of natural gas suppliers and brokers to operate in Massachusetts. Residential and small business participation has remained limited, but large commercial and industrial customers have long used gas marketers to secure fixed price contracts, hedge exposure to volatile commodity markets and align supply with operations. Distribution companies still provide default supply service for customers who do not elect a competitive provider.
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Overall adoption of competitive supply has been moderate compared with some other deregulated states. In recent years only a small share of residential customers have been on competitive electricity supply contracts; commercial and industrial participation has been higher. Many consumers remain on basic service because they are uncertain about shopping or because default rates have sometimes been lower than offers from third party suppliers. Aggregation programs run by municipalities and regional purchasing groups have been the principal mechanism driving larger participation. These programs bundle thousands of accounts together to negotiate favorable rates and increased renewable energy content.
To understand the market today it is important to distinguish between supply and delivery charges. Distribution companies such as Eversource, National Grid and Unitil maintain the poles and wires and deliver electricity, while supply charges reflect the cost of generating the energy. Customers who do not choose a supplier pay the utility’s basic service rate, also called the price to compare. This rate changes periodically, typically on May first and November first, based on competitive solicitations for wholesale supply and changes in fuel prices. During periods of high natural gas prices and constrained transmission, basic service rates can spike, prompting interest in longer term fixed contracts with competitive suppliers or municipal aggregations.
The state also offers a Standard Offer Program through the Mass PowerChoice website to encourage hesitant customers to try shopping. Under this voluntary program electric distribution companies make a twelve month fixed rate offer that is seven percent below the current price to compare. The offer is available to residential and small business customers who have not already chosen a competitive supplier and is presented during enrollment calls or when customers contact the utility. Participants can cancel at any time without paying a fee. The goal of the program is to provide an easy, risk free introduction to the competitive marketplace.
Community choice aggregation has become one of the most popular ways for Massachusetts residents to participate in the competitive market. Enabled by the 1997 restructuring act, this model allows cities and towns to pool their electricity load and solicit bids from suppliers on behalf of all eligible customers. Municipal leaders can choose to increase the renewable content of the supply beyond state mandates while still negotiating rates that are often equal to or lower than the utility’s basic service. By twenty twenty five at least one hundred thirty six municipalities had approved community choice programs, and studies have found that most aggregations offering a one hundred percent renewable option deliver prices below the utility baseline. Customers are automatically enrolled but can opt out at any time and return to basic service without penalty.
Massachusetts has also pursued aggressive clean energy goals through its renewable portfolio standard and the Global Warming Solutions Act. Legislation requires electric suppliers and distribution companies to include a growing percentage of electricity from qualifying renewable resources in their portfolios. In twenty twenty the minimum renewable content was sixteen percent, and it increases each year under an established schedule. Separate carve outs encourage the procurement of solar energy and offshore wind. These requirements, along with regional carbon pricing and a transition away from fossil fuel plants, have increased the underlying cost of electricity but also created opportunities for developers and suppliers that can deliver clean power at competitive prices.
The Department of Public Utilities oversees licensing of electric competitive suppliers, aggregators and brokers. Any company wishing to sell or arrange retail electricity in Massachusetts must submit a comprehensive application that demonstrates technical and financial capability, managerial expertise and compliance with consumer protection laws. Applicants must provide details about their business plan, customer service practices, experience of key personnel and membership in regional transmission organizations such as ISO New England. Brokers and suppliers alike must obtain a surety bond or other financial security. For brokers this bond is generally ten thousand dollars, while suppliers may need to post more depending on the size of their operations. The application fee is modest, and licenses must be renewed periodically. Licensees are required to file quarterly and annual reports with the Department.
It is important to understand the distinction among competitive suppliers, aggregators and brokers. A competitive supplier buys electricity on the wholesale market and sells it directly to retail customers. An aggregator combines the load of multiple customers, takes title to the energy and resells it, often on behalf of municipalities. A broker or marketer acts as an intermediary between customers and suppliers without taking title to the energy. Brokers do not supply electricity themselves; instead they help customers evaluate offers, negotiate contracts and switch suppliers. Because brokers play an advisory role, licensing requirements focus on ensuring they have adequate knowledge of the market and are financially stable.
Natural gas brokers and suppliers must obtain similar authorization from the Department of Public Utilities. The application process requires applicants to disclose corporate ownership, financial statements, technical qualifications and details about their product offerings. They must also post security to ensure they can fulfill contractual obligations. While Massachusetts natural gas choice is available for customers of companies such as Eversource Gas, National Grid Gas, Liberty Utilities and Berkshire Gas, the market has not attracted as many residential participants as the electricity market. Nevertheless, large users rely on gas brokers to design procurement strategies that hedge against winter price spikes and pipeline constraints.
Prospective energy brokers should take several steps to enter the Massachusetts market. First, they should develop a solid understanding of wholesale market dynamics, retail rate structures, renewable requirements and regulatory rules. Many brokers come from sales or energy backgrounds and pursue specialized training in commodity markets and contract negotiation. Second, they should form a legal business entity and secure any necessary local registrations. Third, they must prepare the application for a broker license, gathering financial records, organizational documents, references and evidence of technical and managerial expertise. Fourth, they should obtain a surety bond and submit their application with the required fee. Once licensed, brokers can begin marketing services, partnering with suppliers and developing relationships with municipal aggregation programs. They must maintain accurate records, adhere to marketing rules and submit required reports.
Energy brokers provide valuable services to businesses and households navigating the complex energy landscape. They stay informed about market conditions, monitor changes in utility basic service rates and analyze wholesale price trends. Brokers present clients with a range of contract options, including fixed, indexed and block products, and explain the implications of each. They help customers compare renewable energy options, length of term, early termination provisions and pass through charges. Brokers also assist with contract execution, enrollment paperwork and switching logistics. After a contract is signed, they continue to monitor invoices, verify savings, and explore renewal opportunities as expiration dates approach.
Energy consultants play a broader role than brokers. They often work with large commercial, institutional and municipal clients to develop comprehensive energy management strategies. Consultants evaluate historical usage patterns, demand profiles and efficiency opportunities. They advise on procurement timing, renewable energy credits, on site generation, battery storage, demand response programs and sustainability goals. Consultants help clients integrate distributed energy resources, take advantage of state incentives and comply with reporting requirements under carbon reduction mandates. By combining procurement expertise with engineering insight, consultants guide clients toward long term cost savings, carbon reduction and resilience.
The Massachusetts market presents significant opportunities for brokers and consultants despite its moderate adoption rates. Electricity prices in the Commonwealth are among the highest in the country due to reliance on natural gas for generation, limited transmission capacity and ambitious clean energy mandates. Businesses and residents are increasingly eager to manage costs and align their purchases with sustainability values. Suppliers offer a wide array of products, from conventional fixed price contracts to green power plans sourced from wind, solar and hydroelectric projects. Aggregation programs continue to expand, and many municipalities seek professional guidance to design offerings and educate their residents. Brokers and consultants who can navigate regulatory requirements, negotiate competitively priced contracts and articulate the benefits of renewable energy are well positioned to grow.
Local nuances matter when advising customers in Massachusetts. Eversource operates separate territories in the western and eastern parts of the state with different basic service rates and contract durations. National Grid serves a large swath of central and northeastern Massachusetts, while Unitil serves a smaller area in the north. In addition, there are more than forty municipal light departments that own and operate their own distribution systems; these communities are not subject to the same retail choice rules and often procure power through long term contracts. Customers served by municipal light plants may have limited options to switch suppliers but might still benefit from consulting services to optimize efficiency and consider on site generation.
In the natural gas sector, there are multiple local distribution companies, each with its own tariffs and supply programs. Eversource Gas, National Grid Gas, Liberty Utilities and Berkshire Gas offer default supply service for customers who do not contract with a marketer. Natural gas prices in New England can be volatile during winter due to pipeline constraints, so large users often lock in multi year contracts or use structured products to manage risk. Brokers can help evaluate seasonal hedging strategies, while consultants might recommend energy conservation measures, boiler upgrades or fuel switching to reduce overall consumption and exposure to price spikes.
Consumers considering competitive supply should approach the process thoughtfully. They should review offers from multiple licensed suppliers and verify that the company has an active license with the Department of Public Utilities. Key factors include the price per kilowatt hour, contract length, renewable energy content, potential introductory rates, variable rate clauses and termination fees. Customers should also check whether a contract automatically renews at a higher rate after the initial term. It is important to understand that the utility will still deliver power, respond to outages and provide customer service; only the generation component of the bill changes. Residents who participate in community choice aggregation should stay informed about the program’s renewable mix and ability to deliver savings relative to the utility’s basic service.
Massachusetts deregulation has not been without controversy. Consumer advocates and the Attorney General have raised concerns that some retail suppliers employ deceptive marketing practices, enroll customers without consent or charge rates significantly higher than the basic service. Several studies have found that many households that signed individual contracts ended up paying more than they would have under the utility’s default rate. In response, state leaders have considered legislation to curb certain sales practices or even end individual residential retail choice while preserving municipal aggregations. Proponents argue that competition and choice are fundamental and that problems arise from poor oversight rather than the concept itself. Community choice programs have generally delivered on their promises, demonstrating that aggregation and transparency can deliver savings and renewable benefits.
In recent years the cost of electricity has been influenced by global natural gas prices, regional supply constraints, extreme weather and infrastructure upgrades. Basic service rates have climbed sharply at times, with utilities warning of double digit increases. These spikes have spurred interest in locking in fixed rates through contracts or aggregation. At the same time, state policies promoting offshore wind, solar farms, battery storage and transmission upgrades aim to reduce dependence on imported gas and stabilize costs in the long term. The offshore wind projects off the Massachusetts coast are expected to supply gigawatts of clean power in the coming decade, while the Clean Peak Standard encourages the use of storage and demand response to reduce peak hour emissions and costs.
The Commonwealth is at the forefront of integrating renewable energy and advanced technologies into its grid. Solar adoption has grown rapidly thanks to net metering, the SMART incentive program and declining panel costs. Battery storage projects are being paired with solar farms and aggregated into virtual power plants to provide capacity during peak demand periods. Offshore wind procurement targets total over five gigawatts by the early 2030s, and these projects promise to diversify the supply mix. Utilities are investing in grid modernization and time of use rates, which could enable more flexible consumption patterns. Brokers and consultants must understand how these developments influence wholesale prices, supply risks and opportunities for customers to participate in new programs.
Looking ahead, energy choice in Massachusetts will continue to evolve. Regulators are grappling with how to protect consumers from bad actors while fostering innovation. Municipal aggregations are expected to expand to additional towns and may introduce more sophisticated products such as seasonal rates and time varying renewable options. Clean energy mandates will continue to ratchet upward, encouraging suppliers to source more electricity from wind, solar and storage projects. As electrification of transportation and heating accelerates, demand patterns will shift, creating both challenges and opportunities. In this dynamic environment, the expertise of energy brokers and consultants will remain in high demand.
Choosing the right path in this complex market can be daunting for businesses and households alike. An experienced energy broker can help you interpret utility notices, compare offers, negotiate terms and secure pricing that aligns with your budget and sustainability goals. Energy consultants offer an even deeper level of support, helping organizations craft long term strategies that integrate renewables, efficiency and emerging technologies. If you are interested in exploring a career in this field or seeking professional assistance with your energy procurement, consider connecting with our partners through the links below.
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By working with knowledgeable professionals, you can navigate Massachusetts’s evolving energy marketplace with confidence. Whether you are a homeowner seeking a greener supply or a business looking to manage energy costs, informed choices will help you achieve your objectives. Embrace the opportunity to participate in a more competitive and sustainable energy future.