If you’ve ever called around looking for a better electricity rate for your Massachusetts business, you’ve probably encountered both energy brokers and retail electricity suppliers — and you may have wondered what the difference actually is. The distinction matters for how you buy electricity, who you’re in a contract with, and who to call when something goes wrong.

What a Retail Electricity Supplier Does

A retail electricity supplier — also called a competitive supplier, ESCO, or REP — is a company licensed by the Massachusetts Department of Public Utilities to buy electricity on the wholesale market and resell it to commercial and residential customers at a retail price.

The supplier takes on the price risk: it buys power at wholesale, hedges that position through forward contracts and financial instruments, and offers you a supply price that covers its cost plus margin. The supplier is the counterparty on your electricity contract. When you sign a fixed-rate supply agreement, you’re agreeing to pay that supplier a specific rate per kWh for the term of the contract.

The supplier does not deliver the electricity — that’s still handled by your local utility (Eversource, National Grid, or Unitil). You continue to pay the utility for delivery, transmission, and distribution. The supplier replaces only the supply (generation) component of your bill.

What an Energy Broker Does

An energy broker is an intermediary — a licensed agent who represents multiple suppliers and shops the market on your behalf. When you work with a broker, they collect quotes from several suppliers, present your options, help you compare them, and handle the enrollment paperwork when you choose a supplier.

The broker does not supply your electricity. They are not a party to the contract between you and the supplier. Their role is advisory and transactional — they help you navigate a market with dozens of suppliers and dozens of product structures.

In Massachusetts, energy brokers must register with the DPU under 220 CMR 12.00 and comply with disclosure requirements. Reputable brokers are licensed, represent multiple suppliers, and are compensated through a margin embedded in the supply rate — meaning their services typically cost you nothing out of pocket.

Why the Distinction Matters for C&I Buyers

Understanding the broker-supplier relationship helps you ask better questions when you’re shopping for electricity.

• Your contract is with the supplier, not the broker. If you have a billing dispute or need to discuss contract terms, you’re dealing with the supplier’s back-office team — though a good broker will help manage that relationship.
• The broker’s compensation affects the rate you’re quoted. Brokers earn an embedded margin, so a broker-sourced quote includes their commission. A good broker minimizes this margin by selecting competitive suppliers — but you should ask.
• The broker represents multiple suppliers; the supplier only offers their own products. If you want a true market comparison, work with a broker who has access to multiple licensed suppliers in Massachusetts.
• Not all brokers have access to all suppliers. Broker-supplier agreements vary, and some brokers work with only a limited panel. Ask how many suppliers your broker can quote.

What About the Utility?

Your local utility — Eversource, National Grid, or Unitil — plays a different role. It owns and operates the poles, wires, and meters that deliver electricity to your building. That service doesn’t change when you switch suppliers. The utility also offers a default electricity supply rate (called default service or basic service) if you choose not to work with a competitive supplier. That rate changes quarterly and is set through a competitive procurement process the utility runs.

The Bottom Line

If you’re a Massachusetts business looking to manage your electricity costs, working with an energy broker who has access to multiple competitive suppliers gives you market comparison and expert guidance. If you’re an energy broker evaluating supplier relationships, understanding what suppliers are optimized for the broker channel — versus those that compete with you directly — is essential to building a sustainable book of business.

Contact Gridwealth Electric: Gridwealth Electric is a retail electricity supplier in Massachusetts and Rhode Island that works exclusively through the energy broker channel. Contact us at tford@gridwealth.com.