Your electricity bill consists of two parts: delivery and generation (also known as supply).
- Delivery: Electric delivery service consists of the cost to maintain the electric grid and deliver power from its point of generation to your home or business. Your electric distribution company (also known as electric utility) provides this service for all customers within their defined service territory. All customers pay the distribution company for delivery service.
- Generation: The generation portion of your bill is the cost to generate the electricity you consume. Your distribution company may supply the generation part of your electric service if you do not choose another supplier. However, you do not have to purchase the electricity generation from your distribution company; you may purchase electricity generation from a competitive supplier if you so choose.
If a consumer selects a competitive supplier, he/she will be paying both the distribution company (for the delivery charge) and the competitive supplier (for the generation charge). Depending on the competitive supplier, the consumer may receive one bill (combined billing) or two separate bills. In general, smaller consumers (residential and small commercial) will receive one bill from the distribution company. The distribution company will then transmit generation charges to the consumer’s chosen competitive supplier.
Competitive supply arose as a result of the Massachusetts Electric Industry Restructuring Act of 1997 (“Restructuring Act”). Beginning in March 1998, all Massachusetts consumers (residential, commercial, and industrial) could either buy their electricity generation from a competitive supplier or continue to receive generation from their distribution company. Consumers that do not select a competitive supplier automatically receive their generation services from their distribution company, which is referred to as Basic Service. The Restructuring Act did not open other components of electric service (transmission, distribution, and customer services) to competition – these components continue to be provided to consumers as monopoly services by the distribution companies.
This information is provided by the Department of Energy Resources.