It usually doesn’t pay to play power market

In the retail energy market, deregulation has given consumers more options when choosing an electricity supplier other than a major utility, like National Grid or Eversource.

A 1997 law gave Massachusetts consumers the option to buy their electricity directly from a competitive supplier.

However, with this freedom of choice comes personal responsibility, which may not always work out in the buyer’s favor, as a report commissioned by state Attorney General Maura Healey’s office suggests.

The study, authored by utility consultant Susan M. Baldwin, reveals that many consumers who switched from a major utility to competitive suppliers were charged much higher rates, collectively paying nearly $90 million more for electricity in each of the past two years.

The results reflect similar inflated charges found in earlier reviews.

The report also indicated that low-income households comprise a disproportionately large share of the roughly 450,000 customers in the state’s individual competitive supply market, leaving them susceptible to paying those unnecessarily high prices.

Analyzing the total consumer loss to the competitive supply market by municipality for the month of September 2019, the report found the greatest impact in Gateway Cities, including Brockton,

Fall River, Lawrence, Lowell, Lynn and Worcester, where consumers faced losses ranging from $180,006 in Lawrence to $390,078 in Worcester

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 homes and refusing to leave without signed contracts.

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 practices and overcharges. That total included $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.

As a result of this pattern of overcharges, Healey has backed state legislation that would ban competitive suppliers from selling electricity to individual consumers, something she unsuccessfully pursued in the prior formal legislative session.

But her bill now has been refiled by state Sen. Brendan Crighton, D-Lynn, and state Rep. Frank Moran, D-Lawrence. The proposed ban would not affect suppliers for industrial and commercial customers.

And more importantly, it would continue to allow municipalities to purchase electricity on behalf of residents.

The Retail Energy Supply Association has reportedly taken issue on several occasions with Healey’s claims. According to published reports, the trade group in March said Massachusetts residents could save at least 9% by using a retail energy supplier, with the potential for consumers to collectively pocket hundreds of millions over time.

There are a few competing issues at play here. While some individual companies may prey on uninformed, lowincome populations, many other “green” alternatives suppliers specifically spell out the cost of acquiring electricity through them, which usually comes at a higher price than other sources.

We urge residents to find out whether their community participates in an aggregate program with other cities and towns, which band together to acquire the lowest price due to their combined buying power.

For example, the aggregate contract the town of Chelmsford signed with Public Power back in 2018 provided residents participating in the Chelmsford Choice program with a 9.403 cents per kilowatt hour price for electricity, compared to National Grid’s winter basic service price of 12.673 cents per kilowatt hour.

Selecting this municipal option saves considerable personal energy by relieving the pressure on individuals to sort out the best deal among the maze of energy alternatives.