Boston is just one of many cities in the state of Massachusetts that is located in a deregulated electricity market. Deregulating the electricity market has allowed Bostonians to choose an alternate electric supplier other than their utility company for generation services. Boston electricity rates are growing more competitive as more energy suppliers are entering the market. Free market competition helps push down energy prices as electric suppliers are forced to cut generation costs to increase their market share.
Energy Deregulation in Boston
The door that paved the way for energy choice in Boston was Massachusetts’s Electric Industry Restructuring Act. Before this legislation was passed the utility companies in the state had a monopoly over the delivery and supply of energy. If a customer was unhappy with their services, there was nothing they could do to change. Thanks to the passage of this legislation, the energy market opened its doors to outside competition allowing Bostonians to shop around for energy plans at affordable prices.
Boston Utility Companies
Boston utility companies continue to play a vital role in the delivery of power to their customers. Given the logistics of the power lines, it is not possible to switch to another utility company. If you switch electric suppliers and experience a power outage, you will need to contact the local utility company.
Besides delivering the power, Massachusetts’s utility companies are also responsible for providing its customers a default rate for generation services for those that do not switch to a competing electric supplier. The default rate in Massachusetts is known as the basic service charge and is also referred to as the price to compare. Bostonians can use the price to compare while shopping for a new energy provider. If the energy provider is offering a rate that is lower than the price to compare, then the customer will be saving money by switching to the new provider.
Renewable Energy in Boston
The state of Massachusetts is offering incentives to residents along with energy companies that have their power generated from renewable energy sources. The idea is to cut down on the amount of carbon dioxide that is released into the atmosphere from conventional methods of power generation that include coal, oil, and natural gas. Two incentives being offered by the state are net metering and the Solar Massachusetts Renewable Target (SMART) Program.
Net Metering
Net metering allows customers to generate their electricity and transfer back any surplus of power back to the grid for credits. To qualify, you must be a customer of a regulated utility company such as Eversource, National Grid, or Unitil. Examples of net metering facilities include solar panels on a home or a solar farm. Massachusetts does not differentiate between on-site generation (net metering) and off-site generation (virtual net metering) for purposes of credit calculation.
SMART Program
The Solar Massachusetts Renewable Target Program was created by the Massachusetts Department of Energy Resources. The goal behind this program is to increase the development and availability of solar power in the state. The tariff-based incentive is paid directly to the qualified applicant by the utility company. Eligible projects must be within the service area of Eversource, National Grid, or Unitil.
City of Boston Energy Usage
The Building Energy Reporting and Disclosure Ordinance (BERDO) of Boston require large to medium-size buildings to report their annual energy usage. These reports are made available to the public. The goal of the program is to make building owners or stakeholders responsible for reducing their annual energy usage. The steps buildings take to reduce their usage are measured through energy actions or audits every five years. In 2020, BERDO required the following to report their annual energy usage for 2019:
- Buildings that are 35,000 square feet or larger, or have 35 units or more.
- Any set of buildings that sum up to 100,000 square feet or 100 units.
Energy Consumption by Sector
The state of Massachusetts consumes twice as much electricity as it generates but is among the five lowest states with the lowest electricity consumption per capita basis, according to the U.S. Energy Information Administration. As of 2018, the transportation sector is responsible for the highest level of consumption, followed closely by residential end-users. This is not surprising given that Massachusetts is one of the most densely populated states in the nation.
