The list below includes terms frequently used when discussing aggregation, electricity, and renewable energy.
You receive Eversource’s Basic Service if you do not buy your electricity supply from a competitive electricity supplier. Eversource purchases your electricity for you and uses its Basic Service price to calculate the Supply charge on your electric bill. Eversource’s Basic Service price changes every 6 months for residential and small business customers and every 3 months for large business customers. If you sign a private contract with a competitive electricity supplier, or you participate in an electricity aggregation program, such as Ludlow Power Choice, Eversource will no longer be your electricity supplier, so you will no longer have Basic Service.
Clean electricity is electricity that is generated by a renewable energy resource, such as solar or wind. It is also known as green electricity or renewable electricity.
Electricity delivery (sometimes referred to simply as delivery and also as distribution)
This term refers to the service of delivering electricity to you through poles and wires, and also to the maintenance of that electricity delivery infrastructure. Electricity delivery charges appear on the Delivery portion of your Eversource electric bill. Delivery charges do not include the cost of the electricity itself. Those charges appear on the Supply portion of your Eversource electric bill.
An electricity supplier is a company that buys electricity on your behalf. The price that your electricity supplier charges appears in the calculation for the generation service charge on your Eversource electric bill. In Massachusetts, you can choose who your electricity supplier is:
- Your electric utility, Eversource, can serve as your supplier. In that case, you have Eversource’s Basic Service, and Eversource buys electricity for you and uses their own Basic Service price to calculate the Supply charge on your electric bill.
- You can sign a private contract with an electricity supplier. In that case, Eversource only delivers electricity to you, and they use the price provided by your electricity supplier to calculate the Supply charge on your electric bill.
- Your municipal government can establish an electricity aggregation program and select an electricity supplier for you, as with Ludlow Power Choice. In this case, Eversource only delivers electricity to you, and they use a Ludlow Power Choice price to calculate the Supply charge on your electric bill.
Electricity supply (sometimes referred to simply as supply)
This term refers to the electricity that is delivered. The electricity Supply charge appears on the Supply portion of your Eversource electric bill. The electricity Supply charge is calculated by multiplying the amount of electricity you use (in kilowatt hours) by a price. The electricity Supply charge does not include charges for the delivery of the electricity or for the maintenance of electricity-related infrastructure. Those charges appear on the Delivery portion of your Eversource electric bill.
Green electricity is electricity that is generated by a renewable energy resource, such as solar or wind. It is an informal name for electricity generated from renewable sources.
Renewable electricity is energy generated by sources that can be renewed as opposed to sources that can be used only once, such as fossil fuels. Under Massachusetts state law, a variety of resources qualify as renewable. The main sources of renewable electricity are solar, wind, and small hydroelectric projects. Renewable electricity is sometimes referred to informally as green electricity or clean electricity.
Renewable energy certificates (RECs)
RECs are a method of keeping track of renewable electricity. One REC is minted for every 1 megawatt-hour of electricity generated by a renewable energy project. RECs are tracked in a central database known as the NEPOOL GIS (generation information system). Electricity customers who wish to be able to say they are purchasing renewable electricity from the grid can pay for RECs in addition to paying for the electricity they use. Purchasing RECs gives an electricity customer the right to say he/she has used the electricity generated by renewable energy systems. Once a REC is purchased, it is then retired so that no one else can purchase it and lay claim to having used the same renewable electricity. The Town of Ludlow can purchase RECs on behalf of residents and businesses through the Ludlow Power Choice program.
Renewable portfolio standard (RPS)
The RPS is a minimum amount of renewable energy that is required by law in the electricity sold in a state by the utilities and other electricity suppliers. Massachusetts has an RPS, as do many other states. An RPS specifies both the amount and type of renewable energy that must be included. Because of the Massachusetts RPS, all electricity sold in the state includes a minimum amount of renewable electricity. Massachusetts also has an APS, an alternative portfolio standard, which requires that all electricity include a minimum amount generated by alternative energy sources, which are typically highly efficient but not renewable. Read more on the Massachusetts DOER website.
To opt up is when a customer participating in Ludlow Power Choice changes from the default Ludlow Standard to the Ludlow 100% Green option, which is the program option with a higher renewable electricity content.
To opt out of Ludlow Power Choice is to leave the program and instead receive your electricity supply from a competitive supplier or through Eversource’s Basic Service. You have the right to participate in the program for as long as you like, and to opt out at any time, with no penalty or fee.
In Massachusetts, an electric utility is an electricity delivery, or distribution, company. Electric utilities do not generate electricity, but instead purchase it on your behalf, if you are not already using a competitive supplier. They are responsible for delivering electricity to you. You have no choice in your electric utility as they have geographic monopolies. In Ludlow, your electric utility is Eversource.