Overcharged: The Inflated Premiums Hidden in Massachusetts Electric Bills

A recent study from Synapse titled, “Overcharged: Suppliers’ Retail Premiums Are Inflating Massachusetts Electric Bills,” reveals that, on average, Massachusetts consumers pay $22 per month in retail premiums hidden in their electric bills.

Figure 1. Average cost of supply and Basic Service rate components for residential customers, 2024

Note: Energy, RPS, capacity, and miscellaneous costs are calculated based on actual market costs. Premiums are calculated by subtracting the sum of energy, RPS, capacity, and miscellaneous costs from Retail Basic Service prices. See Table 2 in Chapter 2 for a detailed methodology of how these costs were compiled.

In our study, we show how hidden fees represent the difference between (1) the overhead cost to supply electricity and (2) what consumers are charged. According to power companies, the purpose of these fees is to act as a market hedge that protects consumers against even more volatile prices; although our detailed month-by-month analysis of electrical supply and demand shows that consumers routinely lose money, especially as hidden fees continue to increase. In fact, within the last 10 years, hidden fee increases have caused consumers to pay:

• 43 percent more for electricity,
• $3.4 billion more for electricity than it costs to supply, and
• $47 per month in hidden fees compared to $23 per month during the preceding eight years.

But through common sense regulatory reforms, our analysis also shows that these hidden fees could be reduced by 50 percent. For more, read our technical report, accompanying slide deck, or factsheet!