The list below includes terms frequently used when discussing aggregation, electricity, and renewable energy.
You receive Basic Service from Eversource or National Grid if you do not buy your electricity supply from a competitive electricity supplier. Eversource or National Grid purchases your electricity for you and uses its Basic Service price to calculate the Supply charge on your electric bill. The utilities’ Basic Service prices change every 6 months for residential and small business/commercial customers and every 3 months for large business/industrial customers. If you sign a private contract with a competitive electricity supplier, or you participate in an electricity aggregation, such as Valley Green Energy, your utility 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 utility’s electric bill. Delivery charges do not include the cost of the electricity itself. Those charges appear on the Supply portion of your utility’s 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 and in the calculation for the supply services charge on your National Grid electric bill. In Massachusetts, you can choose who your electricity supplier is:
- Your electric utility, Eversource in Amherst and Pelham and National Grid in Northampton, can serve as your supplier. In that case, you have Basic Service. Your utility 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, your utility 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 and select an electricity supplier for you, as with Valley Green Energy. In this case, your utility only delivers electricity to you, and they use a Valley Green Energy 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 utility electric bill. The Supply charge is calculated by multiplying the amount of electricity you use (in kilowatt hours) by a price. The 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 utility 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 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.
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 to change from a Valley Green Energy offering to a program option with a higher renewable electricity content.
To opt out of Valley Green Energy is to leave the program and instead receive your electricity supply from a competitive supplier or through your utility’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 Amherst and Pelham, your electric utility is Eversource. In Northampton, your electric utility is National Grid.