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State Agency Seeks "Reforms" To Default Service
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The Massachusetts Department Of Energy Resources has used a Department of Public Utilities proceeding reviewing electric and gas rates (Docket 25-200) to advocate for "reforms" to basic electricity service (default service)
As first noted by EnergyChoiceMatters.com, while the DPU's 25-200 proceeding has placed an initial focus on distribution and other nonbypassable rates with the DPU not raising any issues related to default service thus far, the DPU, in opening the review, had specifically invited comments on affordability generally, with the proceeding, among other things, intended to contain customer costs and reduce bill volatility
DOER took the opportunity to recommend that the DPU, "investigate Basic Service reforms to reduce customer supply rates[.]"
Such review of electricity default service could occur in an existing, but dormant, proceeding (23-50), or a new proceeding, DOER said
DOER noted that various pending bills before Massachusetts lawmakers would allow flexible term lengths and procurement schedules for basic service wholesale contracts. Current statute limits the term length of basic service wholesale supply contracts to 6 months
Greater flexibility in default service procurement would allow utilities and the DPU to, "pursue contracts that reduce Basic Service rates by assessing wholesale market conditions," DOER said, with DOER specifically offering a self-supply option (with the utility purchasing directly from the ISO-NE market) as an avenue for savings, citing experiences in other ISO-NE states
DOER said that reforms to basic service procurement could include different procurement schedules, self-supply, block purchases, and other risk management strategies to reduce wholesale supplier risk premiums
DOER cited a recent consultant's report which said that, between 2015 and 2024, wholesale supplier premiums represented a 43% markup on top of the actual cost of electricity supply, totaling $3.4 billion more than actual market costs, potentially increasing the average residential basic service bill by $22 per month, or $264 per year
In separately filed comments, the Office of the Massachusetts Attorney General (AGO) likewise supported changes in basic service procurement, including those contained in pending H.5175 which would provide the DPU with broad authority to design the procurement method for basic service, allowing, "competitive bidding or ... such other process approved by the department [DPU]".
The AGO also, in the DPU's rates proceeding, reiterated the AGO's views on individual competitive retail supply for residential customer, citing a recent update to the AGO's data which states that for the period July 2024 to June 2025, Massachusetts residential customers under retail electric choice in aggregate paid $87.4 million more than basic service (see full story here)
The AGO, as it did in its recent update on costs under retail supplier service, used more nuanced language concerning its sought relief concerning retail supply, when compared to the AGO's prior years' language which called for a complete residential choice ban
The AGO noted that, "the AGO has long supported legislation to protect Massachusetts consumers by banning competitive suppliers from selling electric supply service to individual residential electric customers," but further said that, "Currently, the AGO is supportive of ongoing efforts by the Massachusetts House and Senate, as well as the Healey-Driscoll Administration, to find ways to meaningfully regulate the competitive electric supply industry."
The AGO, in seeking greater enforcement in the retail energy market, stated, "while this competitive supply market remains in place, it is essential to demonstrate that failure to comply with existing laws and regulations will result in substantive licensure action and financial penalties."
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April 15, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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