State’s utility regulator ends bill recalculations after public criticism

Had been a source of consumer confusion

Michael Dwyer/AP

After months of public outcry, the state’s utility regulator has ordered an end to the practice of recalculating the past electric bills of customers when they switch to another electric supplier.

In an order posted online late Monday, the Department of Public Utilities scrapped a rule that required utilities to recalculate the bills of most households and small businesses if they left their utility’s “basic service” plan. Depending on when consumers switched their electric supplier, they could receive a surprise charge on their bill, typically under $100.

Although the rule had been in place for 15 years and many customers end up receiving credits instead of charges, this past winter’s high electric rates and aggressive marketing by competitive suppliers led many consumers to switch their electric provider. Hundreds filed formal complaints about the surprise charges, and some even ended up switching back to basic service.

Dana Gould, a Weston resident who switched to a competitive supplier recently, said she was stuck with $400 in payments to Eversource Energy after switching her house and a rental property to a competitive supplier. Even though she pulled out of her competitive supply contract, she said she was still stuck with the payment.

“I can’t believe I’ve been caught up in this,” she said. “I’m mad and don’t want to pay it, but at least I have the resources.”

By default, residential and small business electricity costs are fixed for six months at a time in Massachusetts. Under the old regulations, however, past bills would be recalculated if customers switched in the middle of one of those six-month periods to reflect the actual, variable cost of electricity. The payments would go to power-generation companies and didn’t affect the utilities’ bottom lines.

Competitive supply companies supported the change, as did Eversource Energy, which said the cost of dealing with confused consumers was higher than the cost of eliminating recalculations. National Grid and the National Consumer Law Center opposed the change, however, saying competitive suppliers could game the system and pass the costs on to basic service users. But the state’s utility regulator said those costs were negligible.

“While we agree that the elimination of this provision raises the possibility of customers ‘gaming the system’ . . . we do not anticipate that the impact of eliminating the bill recalculation provision [will] be significant,” the order said.

Attorney General Maura Healey said she was happy with the regulator’s decision. She also supported the Department of Public Utilities’ decision to monitor when people switch to competitive suppliers to make sure ratepayers are treated fairly.