Understanding Your Options for Choosing an Electric Supplier in Massachusetts

For businesses in Massachusetts, energy deregulation opens up important opportunities to take control of electricity procurement decisions. While local utilities continue to handle delivery and maintenance, Massachusetts allows businesses to select from a competitive market of electric suppliers for the actual energy they use. This means more flexibility, potential savings, and customized contract options tailored to your business’s operational and financial goals.

Here’s a clear breakdown of what deregulation means, how it affects businesses, and key tips to navigate your options.

What Is Energy Deregulation in Massachusetts?

Energy deregulation separates the supply and delivery functions of electricity. Utilities like Eversource or National Grid own and maintain the transmission and distribution networks, ensuring power gets to your property reliably. However, electricity supply—the actual generation source—is open to competition by third-party suppliers, commonly referred to as Competitive Suppliers.

Deregulation aims to create competition among suppliers, driving innovation, competitive rates, and new service options. Businesses have the freedom to choose a supplier that fits their budget, sustainability objectives, and risk tolerance, rather than relying solely on the utility’s default supply service.

What This Means for Businesses

As a commercial energy customer, deregulation gives you:

• Choice: You decide which supplier provides your electricity supply. If better terms become available, you also have the ability to switch.
  
  
• Variety: Suppliers offer different contract types, including fixed-price, variable-price, renewable energy, or hybrid plans.
  
  
• Potential Savings: Competitive suppliers may offer rates below the utility’s “basic service” (default supply) rate, depending on timing, load profile, and credit.
  
  
• Consumer Protection: The Massachusetts Department of Public Utilities (DPU) regulates suppliers to ensure transparent, fair practices and protects consumers from misleading marketing. However, it’s important to stay informed and vigilant when reviewing supplier offers and contracts.

Your Rights and Responsibilities

As a business owner in Massachusetts, it’s important that you receive clear, detailed information on rates, contract terms, and any fees before committing to a supplier. Some may offer you the option to cancel or switch suppliers without penalty at the end of your contract term. Your utility may even provide a single, consolidated bill covering both your delivery and supply charges to keep things simple, though separate billing options may also be available. At the same time, you are responsible for understanding your current contract’s details, including any early termination fees. Clear communication of your specific needs and usage patterns to suppliers helps ensure the quotes you receive are accurate and tailored to your business. Taking time to carefully review these items will help you make well-informed procurement decisions without surprises.

Practical Tips for Choosing a Supplier

When selecting an electric supplier in Massachusetts, it’s important to consider more than just price. Below are tips to help ensure you choose the supplier that best fits your business needs.

• Understand the Default Service Rate: This is the utility’s default supply rate. Use it as a benchmark, but remember it fluctuates every six months for commercial customers based on market conditions.
  
  
• Compare Pricing Structures: Fixed rates provide predictability; variable rates can be lower, but come with price risk.
  
  
• Watch Contract Terms Carefully: Check for early termination fees, minimum contract lengths, renewal language, and product type (fixed vs. pass-through). We cover more of this on our blog.
  
  
• Ask for Help When Needed: Procurement professionals, energy advisors, or brokers can help decode complex offers and provide comparisons tailored to your usage.

What Massachusetts Businesses Should Keep in Mind

Energy deregulation offers valuable choice and control, but it requires active management. Market prices can change quickly based on supply and demand, fuel costs, and regulatory updates, making it important to stay informed about trends and contract options to avoid surprises and maximize value. Choosing suppliers is straightforward, but aligning contract changes with renewal cycles and market conditions can help ensure smoother transitions and better deals.

At Catalyst Power^®, we work closely with businesses across the state to offer expert guidance to take full advantage of the deregulated energy market.