Attorney General Maura Healey ratcheted up the pressure on the retail electric supplier industry on Thursday, releasing a report showing that Massachusetts consumers who chose these suppliers over basic service with their electric utilities collectively ended up paying nearly $90 million more for electricity in each of the past two years.
The study updates two previous reports issued by Healey’s office that showed similar levels of higher charges in earlier years. The newest report, written by utility consultant Susan M. Baldwin for Healey’s office, shows that many consumers who switched to competitive suppliers over the likes of Eversource and National Grid were billed at rates that were higher than what the utilities charged.
The report also shows that low-income households still make up a disproportionately large share of the roughly 450,000 customers in the state’s individual competitive supply market, and pay particularly high prices in that market.
Healey’s office said it has received more than 1,000 complaints in recent years about competitive suppliers engaging in aggressive sales tactics. The allegations range from salespeople pretending to be from utility companies, to harassing customers with repeated calls or home visits, to forcing their way into a home and refusing to leave without a signed contract.
As a result, Healey has pursued state legislation that would ban competitive suppliers from selling electricity to individual consumers. She was unsuccessful in the last two-year session. So her bill has been refiled for this session by Senator Brendan Crighton and Representative Frank Moran. The ban would not affect suppliers for industrial and commercial customers, nor would it affect efforts by municipalities to purchase electricity on behalf of residents. Likewise, Healey’s studies only look at the impact of competitive electricity suppliers on individual consumers. Businesses and municipalities typically put contracts out to bid to get the best price, and have experts that can analyze the fine print.
Healey’s energy and telecommunications division has recovered more than $15 million for consumers through settlements with three competitive suppliers, to resolve accusations of overly aggressive sales tactics and overcharges. Those recoveries include $7.25 million from a $10 million settlement with Starion Energy and two executives in August 2020 and funds from two smaller settlements with Just Energy in 2015 and Viridian Energy in 2018.
The Retail Energy Supply Association has repeatedly pushed back at Healey’s claims. The trade group issued a report in March that showed Massachusetts residents could save at least 9 percent by using a retail energy supplier, with the potential for consumers to collectively save hundreds of millions over time. A spokeswoman for the association said in an email that Healey’s office continues to rely on flawed data. Despite being told about the flaws, the spokeswoman said, the attorney general’s office “continues to release the same report with misleading and false information.”
But Chloe Gotsis, a spokeswoman for Healey, said the RESA report “focused on a completely hypothetical situation – one that is unrealistic and to our knowledge, one that hasn’t occurred anywhere.” She added: “Our office looked at what competitive suppliers actually charged Massachusetts residential customers, and RESA did not.”