Choosing Your Energy Source Deregulation Makes Way for Independent Providers

Public utility companies like NSTAR and National Grid are going the way of Bell Telephone, which for over a century was simply “the phone company,” the sole provider of telephone communications delivered over its vast infrastructure. Now, of course, we buy our service from any of a number of telephone providers which use the lines Ma Bell laid.

Energy deregulation in the1990s gave independent providers, called Energy Service Companies (ESCOs) the opportunity to supply customers with electricity and gas using the public utilities’ infrastructure.

So far, for the most part, ESCO customers have been predominantly large commercial businesses. On the residential end, the ESCOs have not been eager to deal with any less than the largest condominiums projects. Of the 52 registered ESCOs in Massachusetts, for example, only six consider supplying residential clients. But there are signs of change and opportunities opening in some markets for condominiums of any size to buy energy at a competitive price from an ESCO.

The most common way for an average size property to obtain a favorable rate from a supplier is to team up with several other buildings to buy energy in bulk. (More on that later.) But thereare some enterprising entrepreneurs who are targeting the small residential niche, buying energy on auction from the utilities to serve their customer base. Easy Energy, based in Bolton, Massachusetts, for example, is one of a small handful of ESCOs that serve any size residential customer, from single family homes to community associations, and small businesses.

Weighing the Benefits of Switching

The first benefit of switching to a third party energy supplier, naturally, is the potential cost savings. Jim Collins, executive vice president of The Niles Company, Inc., AMO, one of the largest property management companies in New England, said, “We have a couple of high-rise luxury condos in Boston where we were able to achieve savings in the range of 10% over staying with the utility, which is a good savings considering these buildings have pretty big electric bills.”

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Comments

  • I represent Viridian Energy. We sell affordable energy with a choice of 20% clean air (wind, solar, hydro) or 100% E certified. We always recommend variable rates. Our rates are typically lower then NStar or National Grid and historically appear to be lower then their fixed rates. NStar's fixed rate from 7/12-12/12 is 6.70. Viridian's variable rate has been 7/12-5.7, 8/12-6.10,9/12-6.1, 10/12-6.13, 11/12-6.13, 12-12-TBD.