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Gridwealth Seeks Amendments To Massachusetts Bill Whose Current Language Requires Brokers To Post $5 Million Bond; Also Worried Towns May Seek To Apply Authority Under Bill To Ban Residential Choice To All Choice Service
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Gridwealth Electric, a retail electric supplier whose focus includes serving C&I customers through brokers, is seeking amendments to certain provisions of Massachusetts bill H.5175, and has called on its stakeholders (brokers and brokers' individual non-residential customers) to make their voices heard while the bill is before a Senate committee
As first reported by EnergyChoiceMatters.com, H.5175 (formerly H.5151) would, among other things, allow individual cities and towns to ban residential electric choice, and would require a $5 million bond for, "Each energy marketer or other supplier that applies for a retail license," with such language, as written, including brokers, as noted in our prior story and as discussed below
Gridwealth warned brokers and non-residential customers that, "The bill does not distinguish between residential operators and those serving commercial and industrial (C&I) customers. As written, every competitive supplier, every energy broker, and every energy advisor licensed in Massachusetts is subject to the $5 million bond and the town-by-town ban—regardless of whether they serve a single residential customer."
Gridwealth Electric is seeking an amendment to clarify that H.5175's provision that would allow individual cities and towns to prohibit individual residential electric choice is, in fact, only applicable to residential suppliers and residential service. Gridwealth Electric expressed concern that, despite the existing bill text "facially restrict[ing]" the municipality-based electric choice ban to contracts with "individual residential retail customers", a municipality could otherwise argue that any holder of a general retail electric license -- including a C&I-only supplier -- falls within this prohibition's reach even if no residential contracts exist.
Gridwealth is seeking the following amendment to the text related to the municipalities' authority to ban residential electric choice (Gridwealth's modifications, which are solely additions, are underlined):
"Any city or town which accepts this section may by a vote of its town meeting or legislative body, whichever is applicable, prohibit by ordinance, by-law or vote any supplier, energy marketer or energy broker that is licensed to supply electric generation services to residential retail customers, as those terms are defined in section 1 of chapter 164, from executing a new contract or renewing an existing contract for generation services with any individual residential retail customer within such city or town. Such prohibition shall not apply to suppliers serving residential retail customers as part of a municipal aggregation plan pursuant to section 134 of chapter 164, and shall not apply to, or otherwise affect, any entity organizing or administering a program pursuant to section 137 of chapter 164. Such prohibition shall not apply to a supplier, energy marketer or energy broker whose license does not authorize the supply of electric generation services to residential retail customers."
Gridwealth described the last line that Gridwealth proposes to add to the text as shown above as a "belt-and-suspenders" provision to ensure any city or town ban is limited to individual residential service
Regarding financial security for brokers, Gridwealth interprets the existing bill text, as EnergyChoiceMatters.com has, as being applicable to brokers as currently written, even if such is not the intent of the bill
As previously noted in EnergyChoiceMatters.com's exclusive review of the existing bill language, H.5175 would require a $5 million bond for, "Each energy marketer or other supplier that applies for a retail license."
"The bond shall be conditioned upon the full and faithful performance of all duties and obligations of the applicant as a retail supplier," H.5175 states
Notably, under existing statute, "supplier" is defined as, "a supplier of generation service to retail customers, including power marketers, brokers and marketing affiliates of distribution companies, except that no electric company shall be considered a supplier." [emphasis added]
The term "retail supplier" is not defined in the bill
The term "broker" is not defined under existing statute, nor would H.5175 define broker. The DPU's regulations (not statute) provide that a broker is an entity which, "facilitates or otherwise arranges for the purchase and sale of electricity and related services to Retail Customers, but does not sell electricity."
The Massachusetts Supreme Judicial Court has noted that, under statute, "'supplier[s]' are defined to include energy brokers," with the court observing that, "Although the department's regulations distinguish between competitive suppliers and electricity brokers, in that a broker does not own or sell electricity to a consumer and only 'facilitates or otherwise arranges' for its purchase and sale, 220 Code Mass. Regs. § 11.02, a broker is treated as equivalent to a supplier in the broader regulatory scheme." [emphasis added] (Northeast Energy Partners, LLC v. Mahar Regional Sch. Dist., 462 Mass. 687, 971 N.E.2d 258 (2012))
The existing statutory definition of supplier could be read as a broker only being defined as a supplier if the broker is a, "supplier of generation service to retail customers." However, the phrase "including ... brokers" may also be read more broadly as noted above
H.5175 does not narrow the definition of "supplier" nor does the bill explicitly exclude brokers from the $5 million bond (in contrast, the bill specifically contemplates a lower annual license fee for brokers versus suppliers)
However, in terms of the intent of the bill's language, it is notable that other provisions in the same section to which brokers would be subject explicitly mention "brokers", and specifically use phrasing such as, "All energy brokers, energy marketers, and suppliers."
The term "broker" is missing from the language concerning the $5 million bond, suggesting an intent that brokers would not be subject to the $5 million bond. However, a clean-up may be needed to achieve such exemption, given the existing broad definition of "supplier" noted above
The bill's application of the $5 million bond requirement to a "supplier" which applies for a "retail license" is not dispositive on the matter, because, for electricity, neither the DPU's distinct "competitive supplier" license nor the DPU's distinct "electricity broker" license is described as a "retail license"
H.5175 would define "energy marketer" to mean, "any entity, firm, partnership, association, private corporation, or other third-party who contracts with or is otherwise directly engaged and compensated by a supplier to sell electric generation services, or contracts with and is directly compensated by a third-party marketer of the supplier to sell electric generation services on behalf of a supplier, that markets, advertises, or otherwise offers to sell generation service to retail customers that is acting as an agent for a supplier, including, but not limited to, entities engaged in door-to-door, telemarketing, or tabletop interactions with retail customers."
The bill provides that the term energy marketer shall not include contractors, agents, or employees engaged in, "incidental activities where compensation is not tied to customer enrollment."
Gridwealth seeks to limit the $5 million bond requirement to residential service
Gridwealth is seeking the following amendment to the text related to the $5 million bond requirement (Gridwealth's modifications, which are solely additions, are underlined):
Each energy marketer or other supplier that applies for a retail license authorizing the supply of electric generation services to residential retail customers shall execute and maintain a bond, issued by a qualifying surety or insurance company authorized to conduct business in the commonwealth, in favor of the commonwealth. The amount of the bond shall equal $5,000,000 per retail license or per parent company of multiple marketers or suppliers licensed by the department, issued by the department. The bond shall be conditioned upon the full and faithful performance of all duties and obligations of the applicant as a retail supplier and shall be valid for a period of not less than 1 year.
Gridwealth noted that under the DPU's licensing process, suppliers seeking to serve only non-residential customers do not apply for, and do not receive, a license "authorizing" residential supply, which must be specifically requested in the licensing process
Gridwealth called its proposed revisions to the bond requirement the "least invasive" amendment to achieve a carve-out for non-residential suppliers
The use of the term residential, however, still leaves open questions concerning mixed meter scenarios, in which the customer is on a residential rate class, but the customer of record is generally a non-residential customer
Gridwealth alternatively offered language to achieve its desired goals on both issues by offering a more omnibus provision, which would state, "Sections [14] and [22] of this act shall not apply to a retail supplier, energy marketer or energy broker whose license issued pursuant to section 1F of chapter 164 of the General Laws does not authorize the supply of electric generation services to residential retail customers," but Gridwealth noted that this route may be more cumbersome as the bill continues to be amended and section numbers change
Gridwealth warned its stakeholders that, absent the proposed amendments, H.5175 would result in higher costs to customers (due to higher security costs paid by suppliers and less competition in serving individual customers) and less competition, as providers may be driven from, or elect to leave, the market
"Most specialty suppliers and independent brokers cannot capitalize a $5M bond. When they exit, businesses, towns, and nonprofits lose the competitive bids that drive savings," Gridwealth said
Even though the bill's ban on residential electric choice does not apply to municipal aggregation (CCAs), Gridwealth said that the bill would harm CCAs by decreasing the number of competitors in the retail market who would compete to serve CCAs
"CCAs depend on competitive suppliers. If those suppliers are bonded out of the market or banned town by town, CCAs lose the supplier base they need to serve their communities," Gridwealth said
Gridwealth warned of the experience in other states. "Connecticut, New York, and Maryland followed this pattern -- restrictions targeting bad actors, written broadly enough to eliminate the entire market. In Maryland, competitive offers went from ~300 to zero within six months. H.5151 [H.5175] puts Massachusetts on the same path," Gridwealth said
Gridwealth said that its amendments are deigned to protect the following:
• Chamber members and businesses that procure electricity through competitive brokers
• Towns and municipal aggregations (CCAs) that rely on competitive suppliers for community programs
• Nonprofits that use competitive supply to manage operating costs
• Energy brokers and advisors whose entire practice is C&I -- not residential door-to-door
• Future C&I-only suppliers who would enter Massachusetts if the regulatory pathway is clear
Gridwealth, citing Massachusetts Attorney General data, said that competitive supply saved Massachusetts customers $30M in 2023 versus utility service. Citing data from REAL, Gridwealth said that fixed-rate competitive supply averaged 31% cheaper than utility default rates in 2024 -- 5 cents/kWh less
Gridwealth encouraged brokers to share the information concerning, and risk from, the current bill with business owners, chamber members, town officials, and nonprofit leaders, and for such to make their voices heard at the legislature
More information from Gridwealth concerning the bill is available here
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April 9, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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