After skyrocketing prices during the winter drove thousands of Massachusetts households to switch their electricity suppliers, the state is now planning an online marketplace where consumers can comparison shop for electricity plans.
The Massachusetts Department of Public Utilities said it will soon solicit ideas to create a website to help customers “effectively and efficiently shop” for electricity supply plans, according to a notice the agency posted earlier in July.
In May, the DPU proposed rules for the online marketplace, including one that would initially allow companies to only offer fixed-rate plans.
Last winter, many consumers were inundated with pitches from alternative electric suppliers after their local utilities said power bills would be 29 to 37 percent higher.
The pitches often differed in price from one to the next, had different contract lengths, and sometimes included a greater mix of power from renewable sources than the standard offers from companies like National Grid and Eversource.
Before the winter, just 18 percent of Massachusetts households had switched from their utility company’s basic service to a competitive supplier. But by April, after the price increases, that number had risen to 25 percent.
But many of those who switched said they were frustrated by hidden charges and difficult-to-understand contracts.
The complaints prompted the Department of Public Utilities to end the practice of bill recalculations, which sometimes left consumers with unexpected credits or charges on their bills. The next step by the regulator is laying plans for the online marketplace.
Several other states, including Ohio, Texas, Connecticut, and Pennsylvania have similar websites where consumers can compare electricity plans.
In Pennsylvania, which launched its website in 2010, more than 34 percent of households get their electricity from a competitive supplier, compared to 16 percent four years ago, according to PAPowerSwitch.com, the official state marketplace.
Robin Tilley, a spokeswoman for the Pennsylvania Public Utilities Commission, said even more consumers probably used the website to shop around and decided to remain with their local utility. The website is also an information clearinghouse, and Tilley said the commission has recently enhanced the site to emphasize the differences between variable-rate and fixed-rate electric plans.
“We have a consumer education team here in our office, and they’re hearing all the time in the field about the benefit of PA Power Switch,” said Tilley. “Many consumers might not even be aware that they can shop. All they might know is that they get these annoying phone calls from marketers.”
In Massachusetts, companies in the electricity-supply business welcomed the state’s plan to create a shopping website. Stuart Ormsbee, who chairs the New England division of the Retail Energy Supply Association, said a state-backed marketplace would help consumers get comfortable with the idea of shopping around for power.
“The only way to do it presently is . . . [by] doing Internet searches for ‘electric suppliers Massachusetts’ and hoping they get a decent list of companies to reach out to,” said Ormsbee, who works for the energy company TransCanada. In other states, he said, marketplaces have been “one of the most helpful tools or factors to help customer choice.”
There are a few options Massachusetts consumers can use to check local electricity plans, including ShopEnergyPlans.com.
Andre Ramirez, that website’s cofounder, said he’s not worried about competition because he believes his site offers more services than those proposed so far by the state, such as making recommendations about which plans to buy.
Jack Newsham can be reached at email@example.com. Follow him on Twitter @TheNewsHam.