Why is commercial electricity so expensive in Massachusetts?

Energy charges pay for how much electricity you use over the month, measured in kWh. Demand charges pay for how much power you need at once, measured in kW. Many commercial tariffs use the highest 15-minute average in their billing hours, so a short period with several large machines running together can set the demand charge for the month. The exact hours, minimums and power-factor adjustments depend on the tariff.

See how peak demand is measured

Sometimes. Compare a full year of bills and interval data under each delivery option you are eligible for, separately from shopping for a supply contract. National Grid G-3 has optional coincident-peak transmission billing. Eversource G-3 tariffs in Greater Boston and Cambridge offer a similar election, with their own eligibility and billing rules. Both utilities require at least 12 consecutive months on the elected option. A lower bill depends on your load during the relevant monthly grid peaks; switching can also increase costs.

Compare National Grid G-3 billing options

The U.S. Energy Information Administration put the average Massachusetts commercial price at 24.11¢ per kWh in August 2026 (preliminary), against 14.47¢ for the U.S. That average blends supply, delivery and demand charges. A large facility on basic service sees supply alone move from about 10.7¢ to 28.6¢ per kWh from month to month, plus delivery and demand charges on top.

New England depends on natural gas for power and has limited pipeline capacity to bring it in, so supply prices rise in winter. Delivery costs also cover replacing aging equipment, strengthening lines and adding capacity. The regional capacity market adds the cost of keeping enough generation available for the yearly peak.

Mostly supply. Basic service prices for large customers roughly double from autumn to January because gas is scarce and expensive for power plants on cold days. A fixed competitive contract smooths that out but prices the winter risk in.

Basic service is the default supply from Eversource or National Grid when you have not chosen a supplier. Large customers pay a monthly variable price by default, or can elect a fixed price for each procurement period. A competitive contract can beat it, especially through winter, but read the terms: capacity and transmission pass-throughs, swing limits and early termination fees change the real price.

Your share of what New England pays power plants to be ready for the region’s yearly peak hour. It is set by your load during that peak, called your capacity tag. On basic service it is folded into the supply price; on many competitive contracts it passes through as its own line, so lowering your load in peak hours lowers next year’s cost.

Read National Grid’s G-3 rate guide

It varies with size and use more than anything else. A small office may use a few thousand kWh a month; a manufacturing plant spending $10,000 or more a month on electricity in Massachusetts typically uses tens of thousands to hundreds of thousands of kWh. How that use is spread over the day matters as much as the total, because the demand charge follows the peak, not the kWh.