Basic service rate

Massachusetts residential electricity customers who receive their electric bill from National Grid and have not switched off of the default basic service rate will see an increase on their electric bills in December and the first half of 2017. The basic service rate charge represents the component of the National Grid electric bill that encompasses electricity generation supply and transmission costs. In November the rate catapulted to a 21% increase from what it had previously been since May, taking the price to $0.09787 per KWh. The increase can be avoided if customers switch off of the basic service rate and onto a competitive rate plan through Massachusetts electricity choice.

Electricity choice in the state has largely been a success with consumers currently having dozens of rate options to choose. As of October 2016, roughly 40% of National Grid’s 1,016,242 residential customers were purchasing their power from a competitive supplier. Customers who are participating in electricity choice by shopping for their power supplier will not be effected by the recent basic service rate change. The remaining 613,351 customers who remain on the default plan can simply lower their National Grid electric bills by finding a lower electricity rate plan.

Over the last three years the basic service rate has experienced wide fluctuations. Besides near term savings, competitive electricity rate plans that are fixed also provide price stability for consumers who are looking to better manage their home expenses. Many National Grid customers will not be prepared for the 21% rate increase that they will see for the first time on their December 2016 electric bills. Locking in a low rate will not only save money over the next few months, but it also can provide even greater savings in the second half of next year. The new basic service rate of $0.09787 is scheduled to stay in affect through the end of April. As of now it is unknown what the rate will be for the rest of 2017, though recent energy market trends reveal that it is unlikely they will come back down below nine cents.

Below is a list of some of the best electricity rate offers for National Grid customers in Massachusetts. All offers are updated every day, and are offered by suppliers who have been licensed by the state of Massachusetts.


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National Grid Massachusetts customers on the variable basic service rate have seen huge volatility in the price that they pay for electricity over the last year. After recent news of National Grid releasing their variable rate over the next six months, it is apparent that the volatility will continue. Consumers on the variable basic service rate can avoid the price uncertainty, as well as reduce their electricity bills, by shopping for lower competitive electricity rates offered by alternative Massachusetts electricity suppliers.

Through State energy choice laws, Massachusetts has opened up their electricity market to allow competitive energy companies to offer service to residential and business customers. The law allows customers who receive their electric bill from one of the three major utilities in the state – NSTAR, National Grid, and Western Mass Electric – to shop for a lower electricity price that would replace their utility default rate for electricity generation supply. The default rate is charged to all customers who decided not to purchase power from a competitive supplier.

Customers on the default rate pay a charge known as the basic service rate for electricity supply which includes the generation and transmission components of the electric bill. Default rate payers have a choice between paying a fixed basic service rate and a variable basic service rate. The fixed rate remains the same for six month periods, while the variable rate changes every month. However, even though the variable rate changes on a monthly basis, customers know what that variable rate will be for the next several months. Both rates are determined through an auction process that National Grid holds for alternative suppliers for the right to service basic service rate customers. The outcome of the auction process is largely dependent on the condition of the wholesale energy markets during the time of the auction.

Both rate structures have been extremely volatile over the last several years, with recent rates being the higher end of the spectrum. The high default rates have allowed for competitive electricity suppliers to offer rates that are well below the basic service offers, presenting an opportunity to for customers to lower their National Grid electric bills. Since 2012, the variable basic service rate has ranged from a low of 6.544 cents per KWh in September of 2012 to a high of over 20 cents per KWh in January of 2015. In November, the variable rate will increase by 26.4% from the October rate. Customer who remain on the variable basic service rate are going to see their total electric bills increase by about 20% as their supply rate goes up from 8.8 to 11.27 cents. The variable rate will continue to rise over the next several months going to 13.38 cents in December and then over 15 cents in both January and February of next year.

The volatility in the rates and increasing electric bill amounts can be stopped by simply shopping for a lower competitive electricity rate. In order to avoid further price uncertainty consumers should find a competitive offer that is fixed and not a floating month to month price. Finding a fixed electric rate will eliminate the uncertainty of volatility in the energy markets that leads to negative surprises on the electric bill amount. Furthermore, if the fixed rate is lower than the variable basic service rate on a monthly basis, consumers will also save money through a lower electric bill.


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Energy choice in the state of Massachusetts has been active for the last several years, but for the most part has remained under the radar. Educated consumers who were aware of the choice laws may have participated by locking in a low electricity rate with a competitive Massachusetts electricity supplier or even elected to purchase power derived from renewable resources through the choice market. However, for the majority, energy choice hasn’t been a concern as the competitive rates haven’t offered significant savings off of the local utility default rates; that is about to change in a big way for Massachusetts residences who receive their power from National Grid.

On November 1, 2014 National Grid electricity customers will see the rate they pay for power supply increase by as much as 100%, depending on their rate structure. The 100% increase is not a typo, many National Grid electricity customers in Massachusetts will see their monthly electric bills double due to a rate increase. The rate increase can be avoided, or managed by consumers who search for competitive residential Massachusetts electricity rates as the rate spike will only effect customers on the default basic service rate.

National Grid in Massachusetts offers a default electricity rate for those consumers who have not elected to participate in finding a competitive choice rate. The official name for the default rate is the basic service rate, and it is this rate that will be increasing on November 1, 2014. Basic service customers are either on a fixed rate structure that changes every six months, or a variable rate structure that changes every month.

Massachusetts electricity customers who are on the National Grid basic service fixed rate will see their electricity supply rate increase from $0.08277 on October 31, 2014 to $0.16273 on November 1, 2014 if they do not select a competitive electricity rate plan. The $0.16273 is set to remain in tact through April 30, 2015. Locking in a competitive fixed Massachusetts electricity rate that is lower than the $0.16272 will provide some savings right away, and may protect consumers from another rate increase that could take effect in May of 2015. Customers on the National Grid basic service variable plan do not have it much better as the expected price will get as high as $0.22067 in January 2015


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