Competitive supply glossary

Definitions for common competitive supply related words.

Definitions

Automatic renewal is a provision in some competitive electric supply contracts.  The provision allows the supplier to automatically renew the contract after the end of the initial contract term. The renewed contract may have a different pricing structure than the initial contract.

Basic service is the electric supply product that electric companies provide to consumers in their service territories that have not selected a supply product from a competitive supplier.

Billing cycle/meter read is the schedule by which your electric company reads your meter/issues you bill.  The schedule is generally 30 days.

Cancellation fee is a provision in some competitive electric supply contracts.  The provision allows the competitive supplier to assess a fee to consumers that end their contract before the end date. Cancellation fees can either be:

1. a fixed dollar amount, or
2. a dollar amount per month remaining on the contract.

Competitive supplier is an entity licensed by the DPU to sell electric supply products to electricity consumers. The DPU grants licenses to competitive suppliers based on a review of their technical and financial ability to offer such products.

Delivery is associated with the equipment to transport electricity to your home and/or business. Wires, poles, and meters are associated with delivery.  The electric companies provide the delivery component of electric service to all electricity consumers within their service territory.

Distribution facilities refer to the low–voltage delivery wires, poles and other equipment that the electric companies own to deliver electricity within their service territories to your home and/or business.

Department of Public Utilities (DPU) is the MA regulatory agency responsible for the oversight of:

1. investor owned electric power utilities,

2. natural gas utilities, and

3. water utilities.

The DPU also:

1. licenses electric and gas competitive suppliers, electricity brokers, and gas retail agents

2. handles consumer complaints, and

3. ensures that licensed suppliers, brokers, and retail agents follow DPU regulations.

Electric company provides the delivery component of electric service as a monopoly service to all electricity consumers in their specified service territories. There are four electric distribution companies in Massachusetts:

1. Eversource Energy East (NSTAR Electric Company);
2. Eversource Energy West (Western Massachusetts Electric Company);
3. National Grid (Massachusetts Electric Company and Nantucket Electric Company); and
4. Unitil (Fitchburg Gas & Electric Light Company).

Electric service consists of two components: supply and delivery.

Electric supply products are products offered by entities that buy electricity from the wholesale electricity market for sale to electricity consumers. Your electric supplier may be your electric company or a competitive supplier. Your electric supply product determines the cost of the supply component of your electric service.

Electricity broker is an entity licensed by the DPU to assist electricity consumers in selecting electric supply products offered by competitive suppliers. The DPU grants licenses to electricity brokers based on a review of their technical ability to provide this service.

Fixed-price product is an electric supply product in which the price remains constant for the contract term.

Information disclosure label is a document that your electric supplier must provide you prior to initiating your service. You will also receive this document on a regular basis thereafter. The information disclosure label summarizes:

1. the contract terms, and
2. the environmental impact associated with the electric supply product you have purchased.

Kilowatt (kW) is a unit of measure of electricity demand at any point in time. One kW is equal to 1,000 watts.

Kilowatt-hour (kWh) is a unit of measure of electricity used over time. One kWh is equal to 1,000 watt-hours. For example, if a customer used a 40-watt light bulb for 100 hours, the customer would be billed for 4 kWh (40-watts x 100 hours = 4,000 watt-hours or 4 kWh).

Municipal aggregation is when towns buy electric supply products on behalf of the consumers within their borders.

Municipal light plant is an electric utility that is owned, maintained, and operated by a town. Municipal light plants serve 50 towns in Massachusetts.

Renewable energy certificates (RECs) are the certificates issued to renewable energy resources for each megawatt-hour of electricity they produce. Retail electric suppliers buy RECs to satisfy both the mandatory and voluntary components of their electric supply products.

Renewable energy product is an electric supply product for which the renewable energy content exceeds the minimum level required by the RPS.

Renewable portfolio standard (RPS) establishes the minimum renewable energy content required for electric supply products sold in the Commonwealth. The RPS establishes the criteria that determine the types of renewable energy resources that retail suppliers can use to satisfy their RPS requirements.

Rescission period is the 3-day period when consumers may cancel a contract with a competitive supplier without penalty.

Restructuring act refers to the Massachusetts Electric Industry Restructuring Act of 1997. The Restructuring Act gave consumers the option to pick a supplier for the supply component of their electric service. Before the Restructuring Act, consumers had to use their electric distribution company for supply.

Slamming is the unauthorized switching of a customer account from the customer’s current retail electric supplier to another retail electric supplier.

Supply is the component of electric service associated with producing and buying electricity that you use in your home and/or business. Because of the Massachusetts Restructuring Act, you can:

1. buy your electric supply from your electric company, or

2. you can buy your electric supply from a competitive supplier.

Transmission facilities refers to the high-voltage delivery wires, poles, and other equipment that transport electricity from electric power plants in the region to the service territories of the electric companies.

Variable-price product is an electric supply product in which the price may change on a monthly basis, based on conditions in the electricity markets.