Massachusetts Retail Choice Power Market Cost Consumers $250 Million Over Three Years: Attorney General

Attorney General Maura Healey, a Democrat, released a report on Aug. 1 showing that Massachusetts electric customers who switched to a competitive electric supplier paid about $76 million more on their bills from July 2017 to June 2018 than they would have if they remained with their utilities. Healey underscored the need for legislation to protect real competition and stop suppliers from making direct solicitations to residents.

The report expands upon the initial study released last March, adding new data that brings the total net losses to $253 million for consumers over the three-year period from July 2015 to June 2018. Low-income households participate in the residential electric supply market at double the rate of non-low-income households, paying 25 percent higher rates on an average, the report found. These households lost an average of $166 in the one-year period from 2017–2018.

In the past four years, the AG’s office received over 1,000 complaints about competitive suppliers engaging in aggressive and deceptive sales tactics. Complaints include suppliers pretending to be a utility company to get sensitive information, harassing customers with repeated calls or visits, and door-to-door salespeople forcing elderly customers to sign contracts.

The Massachusetts Department of Public Utilities opened an investigation in January to discuss measures, such as increasing customer awareness, improving the department’s ability to investigate dubious practices by suppliers and other means that would improve the operational efficiency of the market.

About half a million residents in the state receive their electricity from a competitive supplier. Over two decades ago the Massachusetts Legislature restructured the electricity industry, creating a competitive market for the supply of electricity to cut costs.