A debate unfolding in New England is highlighting a challenge familiar to many energy buyers: balancing the opportunity to capture market-based pricing with the desire for greater price certainty.

Recent discussions in Massachusetts, highlighted by The Boston Globe, have focused on proposals that could increase the use of wholesale spot-market purchases for default electricity supply. Supporters argue that greater spot-market exposure could, during some periods, reduce costs associated with advance procurement. Critics argue that greater spot-market exposure could increase bill variability when wholesale prices rise.

The discussion has drawn comparisons to procurement approaches used in neighboring New Hampshire, where policymakers and stakeholders have also evaluated the benefits and risks associated with varying levels of wholesale market exposure.

Across U.S. energy markets, organizations continue to weigh the tradeoff between pursuing cost opportunities and managing price volatility. The debate highlights how procurement design can influence customer exposure to market price movements and bill variability.

Source: The Boston Globe