Massachusetts Basic Service vs Competitive Supply and Which Is Right for You

Basic Service is the default electricity supply option provided by your utility (Eversource, National Grid, or Unitil) if you don't choose a competitive supplier. Key facts about Basic Service:

• No utility profit: Massachusetts utilities don't profit from selling electricity supply
• DPU-regulated: Rates set through competitive bidding overseen by Department of Public Utilities
• Lowest bidders: Utilities select lowest-bidding wholesale suppliers
• No markup: Wholesale costs passed directly to customers
• 6-month fixed pricing: Your rate stays constant for six months before adjusting

Price to Compare: The Basic Service rate is also called the "Price to Compare" – the benchmark against which you should evaluate any competitive supplier offer. 💡 Your utility remains responsible for delivering electricity regardless of who supplies it.

Massachusetts utilities procure Basic Service electricity through regulated auctions conducted twice yearly. The rate-setting process:

1. Eversource and National Grid solicit bids from wholesale suppliers
2. DPU reviews results to ensure competitive pricing
3. Winning bids determine your Basic Service rate for the next 6 months

Rate periods:

• January rates: Cover January through June
• July rates: Cover July through December

This structure splits the expensive winter months across two rate periods to reduce volatility. Example: Eversource's residential Basic Service rate increased from ~13.241¢/kWh to 14.884¢/kWh starting August 1, 2025 (12.3% increase). 💡 These rates reflect actual wholesale market conditions with no profit margin for the utility. Check your bill or utility website for current rates.

Competitive electricity supply allows you to purchase electricity generation from a DPU-licensed supplier instead of your utility's Basic Service. Licensed competitive suppliers include:

• Constellation Energy
• Direct Energy
• Clearview Energy
• And others

Key difference from Basic Service: Competitive suppliers are for-profit businesses that include margins in their pricing. Rate types offered:

• Fixed-rate plans: Constant price for contract term
• Variable-rate plans: Prices change monthly
• Introductory "teaser" rates: Increase after initial period

How switching works:

1. Enroll directly with the competitive supplier
2. Supplier notifies your utility of the change
3. Utility continues delivering electricity and sending bills

The Massachusetts Attorney General's Office has documented significant consumer losses in the competitive supply market. Key findings:

• January 2025 report: Residential customers lost $73.7 million compared to Basic Service (July 2023 – June 2024)
• Cumulative losses: Over $500 million from July 2015 through June 2024
• Consistent pattern: Reports in 2018, 2019, and 2021 found customers typically lost money

Attorney General's response: Called for ending the individual residential electric supply market entirely, proposing legislation to ban suppliers from contracting directly with individual residential customers. What would NOT be affected:

• Municipal aggregation programs
• Commercial electricity markets

🚩 Bottom line: These findings suggest most residential customers are better off staying with Basic Service.

Several factors explain why competitive supply often costs more than Basic Service in Massachusetts. Common supplier tactics:

• Teaser rates: Low introductory rates that dramatically increase after promotional period
• Variable rate spikes: Rates can hit 2x Basic Service during high-demand periods
• Sticky pricing: Suppliers maintain high prices even when wholesale markets decline
• Auto-renewals: Switch customers to higher standard rates without clear notification

Hidden overhead costs:

• Marketing and advertising
• Customer acquisition expenses
• Profit margins for shareholders

Basic Service doesn't include these costs. Sales tactics to watch:

• Door-to-door salespeople with misleading savings claims
• Telemarketing with aggressive pitches

⚠️ Unlike Basic Service's nonprofit pass-through pricing, competitive suppliers must generate returns for shareholders.

Despite overall statistics, competitive supply may benefit specific situations. When it might work:

• Market peak timing: Long-term fixed-rate contracts can lock in savings if wholesale prices rise further
• 100% renewable energy: Some customers accept premium pricing for environmental values that Basic Service doesn't offer
• Budget certainty: 12 or 24-month fixed rates vs. Basic Service's semi-annual fluctuations
• Business customers: Large usage volumes may negotiate custom rates unavailable to residential customers
• Municipal aggregation: Cities negotiate bulk rates often below individual supplier offers

If considering competitive supply:

• ✅ Choose only fixed-rate plans
• ✅ Select reputable suppliers with clear contracts
• ✅ Avoid plans with automatic variable-rate renewals

Before switching suppliers, compare any offer against your current Basic Service rate. Where to find your Basic Service rate:

• Your utility bill
• mass.gov

Easier option: ElectricRates.org automatically compares rates from all DPU-licensed suppliers against your current Basic Service rate—Massachusetts customers save an average of $521*/year. How to calculate savings:

• Basic Service: 14.884¢/kWh
• Supplier offer: 13.5¢ fixed for 12 months
• Savings: 1.384¢/kWh

Questions to ask before enrolling:

1. Does the supplier charge monthly fees?
2. What happens after the contract ends?
3. Does the rate include all charges?

⚠️ Warning: Read complete terms and conditions, not just the advertised rate. Many "savings" disappear when all costs are calculated.

Eversource serves approximately 1.4 million electric customers across Greater Boston, the South Shore, and Western Massachusetts. Current rates (August 2025):

• Residential Basic Service: ~14.884¢/kWh
• Rate changes every 6 months (January and July)
• Applies only to supply (generation) portion
• Delivery charges are separate and stay the same regardless of supplier

Key details:

• Customers automatically placed on 6-month fixed-price option
• Check current rates at eversource.com or on your monthly bill
• "Price to Compare" on your bill = your Basic Service generation rate

💡 Important: Compare any competitive offer against YOUR specific Price to Compare, not rates from previous months or other utilities.

National Grid serves approximately 1.3 million electric customers in central Massachusetts and parts of Greater Boston. Rate structure:

• Like Eversource, rates adjust semi-annually (January and July)
• Determined through DPU-supervised competitive bidding
• Represents actual wholesale electricity cost with no profit markup

Pricing options:

• 6-month fixed pricing: Default for residential customers
• Monthly pricing: Available for customers who prefer shorter rate periods

Where to find your rate:

• nationalgridus.com
• Your monthly bill
• "Price to Compare" indicates your Basic Service generation charge

💡 Always compare supplier offers against YOUR specific utility's current Basic Service rate.

If you've switched to a competitive supplier and want to return to Basic Service, the process is straightforward. Steps to return:

1. Contact your competitive supplier to cancel your contract
2. Review your contract for early termination fees (if ending before term completes)
3. Wait for processing – you'll automatically return to Basic Service on next meter read

What you DON'T need to do:

• Contact Eversource or National Grid separately – transition happens automatically
• Pay any penalty to the utility for returning
• Wait through any utility-imposed waiting period

If you have problems:

• Supplier refuses to process cancellation
• Unauthorized fees charged

📞 File a complaint: Massachusetts DPU at 1-877-886-5066 💡 Keep records of your cancellation request and any correspondence.