Direct Energy opens up for Massachusetts residents

As electricity deregulation and competition in electricity rates begins to pick up in Pennsylvania, Pittsburgh-based Direct Energy has announced it has expanded into another major competitive electricity market – Massachusetts.

Located in the energy congested northeast, Massachusetts faces some of the highest electricity rates in the country. According to the U.S. Energy Information Administration, the state suffered from the fourth-highest prices in the country in 2009 at 15.45 cents per kilowatt-hour on average. Residential electricity rates could prove even more costly, averaging 16.87 cents per kilowatt-hour.

Because of these high prices, Massachusetts was one of the earliest states to allow businesses and residents to switch electricity providers, but lagging competition in the early parts of the last decade discouraged many from making the jump, according to The Worcester Telegram & Gazette.

"It’s only been recently that the state has made progress on residential competition, so this is why we just began to start servicing residential customers now," Julie Hendry, public relations specialist for Direct Energy’s residential business, told the Telegram & Gazette in an email.

The company's latest big move is to begin offering electricity service in the National Grid Massachusetts service area. The Massachusetts company is a subsidiary of the British company National Grid and covers more than 1.1 million customers spread across all four corners of the state, though concentrated in Central Massachusetts.

"We encourage customers to research their power supply companies so they can make an informed decision," National Grid spokeswoman Deborah Drew noted. "The more power supply options there are for customers, the better news it is for customers, because they have more options."

Drew explained that since National Grid still delivers the electricity, which is why they still send the utility bills, it actually loses very little by having customers switch electricity suppliers. Meanwhile, customers can save substantially on a major portion of their electricity bills.

While National Grid currently offers a rate of 8.33 cents per kilowatt-hour for December, according to the Telegram & Gazette, Direct Energy has a one-year fixed-rate plan with prices as low as 7.78 cents per kilowatt-hour, or more than 6.4 percent savings. The electricity provider imposes no cancellation fee either, making it much simpler for residents to switch electricity companies again if they choose.