Back in 1997 the Massachusetts Legislature changed the local electricity energy market forever. The intention of this change in law was to create a market that would be more competitive and thus more cost effective for consumers. However the state still wanted to ensure that the people were provided with an excellent source of energy. So, how has this worked out for them so far?
In 2001, the deregulation of electric energy in Massachusetts would declared as an incredible success. Even in 1998 people began to see a reduction in the cost of electric rates. By 1999 there had already been a ten percent decrease and that year it fell a further five percent. That drop held for three more years until 2002.
However, that is not say that there hasn't been issues for consumers. Although the fall in energy rates were welcome over the last few years oil and gas prices have risen. This has left some states in the cold, almost literally. However, analysts have always pointed to the fact that deregulation is still working and has massively increased Massachusetts energy choice.
Energy Companies Were Protected
You might think that anything good for the consumer would be bad news for the energy supplier. But this hasn't been the case. The legislative mechanism used in Massachusetts allows flexibility within the electric rates of the energy for changes to cost. Due to this, the businesses were able to stay financially efficient and economically viable. Essentially, energy businesses were able to gain back money from the cost of energy.
How Much Was Saved
Since 1997, customers in Massachusetts have saved over one point five billion which is remarkable. Undoubtedly these savings are a direct result of the legislative action taken by the state. Typically, these savings have come from price reductions from energy companies that were desperate to stay competitive. By 2001 NSTAR customers had saved upwards of five hundred million on their bills.
How Does It Compare To Other States
Across the board, energy costs in Massachusetts are approximately twenty percent lower compared to what people in California pay. By this figure it seems clear that experts were right when they suggested that the legislation provided by Massachusetts provided a significant advantage. It is also helped by the freedom the energy companies have here. They are able to enter into long term contracts that helps them keep costs low and increase Massachusetts energy choice.
Looking Towards The Future
In 2002 the energy sector in Massachusetts was growing at a remarkable rate, in direct contrast with the situation in other states. It seems that the energy market will continue to growl to cater to new demand. Even though the oil and gas prices are an obstacle, it is one the Massachusetts energy companies are keen to overcome. Indeed, there may be considerable uncertainty about the future in the energy market but one thing is clear. Massachusetts citizens should be grateful for the mass savings and huge benefits that deregulation have provided in their state. Without this key act of legislation, the energy market here would be quite different compared to how it is today.