A lot of people are aware that we have both regulated and deregulated energy markets in the United States. But a lot of homeowners aren't fully aware of the differences, or how either of them really affects costs. It's important to understand this area of the energy market.
Quick facts about Massachusettes energy usage:
- Massachusetts generated 64% of its electricity from natural gas and 7% of its electricity from coal in 2015.
- In 2015, 9.4% of net electricity generation in Massachusetts came from renewable energy resources, almost two-thirds from solar, wind, and biomass and more than one-third from hydroelectricity.
- In Massachusetts, 27.6% of residents use fuel oil as their primary heating fuel, more than five times higher than the nationwide average of 5.3%.
What is the average electricity rate in Massachusetts?
The EIA (U.S. Energy Information Administration) states the typical electricity rate for Massachusetts is presently 22.59¢ per kWh. Based on this price, you could see savings as large as 42% based upon a typical home using 1,000 kWh/month. That's big savings!
Note: The EIA average includes all taxes, transmission and supply fees. That is the “all in” rate and includes all the utility fees and the retail electricity costs. We provide the same “all in pricing” so you get the real “apples to apples” price comparison when you??re shopping for energy rates in Massachusetts.
A lot of people hate the idea of a deregulated energy market. But most people are perfectly happy with it. Before the 1980s, no-one in America had much choice about who provided them with energy. Your only option was to use your local utility. The pricing was regulated by the government and the distribution sources were extremely limited.
While many like this socialist-leaning practice, it does create a monopoly in the energy marketplace. Deregulation - the removal, or decreasing, of government regulation - began to take place in the 70s; this allowed private companies to set up their own energy businesses, allowing customers more choice and, in the vast majority of cases, much better prices.
The deregulated states
Actually just under half of the states in the U.S. functions with deregulated energy. For various reasons - some infrastructural, others sociopolitical - plenty of states such as Hawaii, Iowa, and Oklahoma have rejected it. Some had deregulated energy markets that have since been suspended, such as in California.
The deregulated states include Connecticut, Illinois, Maine, Michigan, New York, Texas, Washington DC, and - of course - Massachusetts. The energy rates in Massachusetts are affected by the nature of the market just as in these other states, and in ways that don't affect the regulated energy market states.
How this affects you
Your Massachusetts Energy Choice becomes especially important when you consider this information. The fact that you live in a state with a deregulated energy market is the reason why you have to shop for an energy provider in the first place! Some would certainly prefer to just have a regulated energy market because it makes things a bit simpler - after all, when you remove choice from any equation, things are much simpler! But the idea of not having any choice definitely puts some people off.
What's more is that you definitely have a lot less control over the cost in a deregulated market. If one energy provider starts charging you too much or doesn't help when you need it, then you can simply switch provider. The companies have more incentive to work harder to please the customer - such is the nature of a non-monopolistic market!
Assessing your options
Homeowners in Massachusetts certainly have a wide range of options when it comes to energy providers. (Not so much when it comes to gas providers, however - the Massachusetts gas market is still very much regulated, though you have some choice when it comes to your tariff.)
If you don't know how to properly assess your options and needs, then you risk going with a company that can overcharge you. You should be looking at both the rate that a given company offers - the lower the better, of course. But you should also be taking care to assess their reputation. Checking customer feedback, as well as expert reviews, can help you find the right balance between low cost and quality service.