Many Massachusetts residents who have switched energy suppliers are still paying too much for electricity, Attorney General Maura Healey said in a new report released Thursday.
The report found that consumers who had switched to competitive electricity suppliers paid $76.2 million more a year than if they had stayed with their state-regulated utilities, such as Eversource Energy and National Grid. The period covered the fiscal year that ended in June 2018.
Healey has been hammering away at so-called competitive electricity suppliers, saying they often scam residents with deceptive marketing tactics that dangle low prices but end up costing more. In March 2018, she released a similar report showing that consumers had paid $176.8 million more than they should over a two-year period.
Since the release of the first report, her office has sued a Connecticut-based energy supplier, reached settlements to refund customers with others, and filed legislation that would ban suppliers from negotiating contracts directly with consumers.
Healey’s office said it had received about 300 complaints about suppliers since the first report. In the past, complaints have accused suppliers of using questionable sales tactics such as pretending to be utility companies in order to gain access to sensitive information, harassing residents through repeated telemarketing calls, and even incidents where door-to-door salespeople allegedly pressured elderly people by refusing to leave until they signed a contract.
Low-income customers were hit hardest by these strategies. The report found those customers contracted through the competitive electricity market twice as much as those with deeper pockets, and paid especially high rates.
The energy suppliers “target non-English-speaking communities,” added Charles Harak of the National Consumer Law Center, an advocacy group. “And I’ll bet they find it a little easier to deceive people with low income.”
Harak called Healey’s report “highly credible” and “consistent with every other state that has studied the problem.”
Industry representatives condemned the tactics described in the report, but cautioned against regulation.
“If you were going to draw a conclusion at all from the report, it would be that at most it tells you consumers certainly could save more money if they were better at shopping, if they were paying more attention to the terms under which they’re buying electricity and shopping more frequently,” said Dan Allegretti, a spokesperson from the Retail Energy Supply Association.
But, Allegretti added, “I think the suggestion though that somehow we should take people’s choice away and end competition in this industry is a bit like cutting the head off the patient. It certainly makes the symptoms go away, but it’s not really the best solution.”
Frank Caliva of the American Coalition of Competitive Energy Suppliers said there are “legitimate” concerns about sales tactics, but noted it is often difficult to directly compare plans from competitive suppliers with those from the utility.
“One of the things we like to emphasize is comparisons between the utility commodity price and the supplier price is very difficult to do on an apples-to-apples basis, because the terms are different, the price is different, what’s included is different,” Caliva said.