Overcharged - Suppliers' Retail Premiums are Inflating Massachusetts Electric Bills

Barr Foundation
Project completed.

At a time when electricity prices in New England are high and rising, a new study by Cambridge, Massachusetts-based consulting firm Synapse Energy Economics finds Basic Service ratepayers in Massachusetts are paying $22 per month, on average, in hidden fees on their electric bill. Our report, Overcharged: Suppliers’ Retail Premiums are Inflating Massachusetts Electric Bills identifies how these fees can be more than halved with commonsense, achievable regulatory reforms Massachusetts. 
These hidden “retail premiums” represent the difference between what consumers pay on their electricity bill, and what electricity actually costs in the ISO New England electricity market. These premiums are meant to act as a market hedge—by paying more for electricity, consumers are ostensibly being protected against even more volatile market prices. However, a detailed month-by-month analysis of supply components, including energy, capacity, renewable portfolio standard compliance, and other smaller, miscellaneous costs, shows that consumers routinely lose money.

Our analysis finds that:

  • Over the past ten years, for residential customers on the “Basic Service” default option for electricity supply, this premium has translated into a markup of 43 percent. Between 2015 and 2024, customers paid $3.4 billion more than ISO New England’s market cost, translating into concealed premiums of $22 per month.
  • This premium has grown over time, with consumers paying $47 per month in premiums in 2023 and 2024, compared to $23 per month in the preceding eight years.
  • In 88 percent of the months from January 2015 to December 2024, consumers paid more than the market price of supply. In 12 percent of months (14 months), retail customers paid at least double the actual cost of supply.

For more, read our technical report and accompanying slide deck.