AG Healey Calls For End To Competitive Electricity Market

WORCESTER, MA—Citing aggressive sales tactics, false promises of cheaper electric bills and the targeting of low-income, elderly, and minority residents, Attorney General Maura Healey on Thursday issued a report calling for an end to the competitive electricity supply market for individual residential customers in Massachusetts.

Healey said that in general, across the state, low-income residents paid $230 more in bills than "if they'd never answered the door," referencing utility companies who solicit new customers. In Worcester, 19,000 families forked over an extra quarter of a million dollars in just one month, said Healey on Twitter Thursday.

AG Healey stood with Quincy Mayor Thomas Koch, along with consumer and civil rights advocates. The report found that Massachusetts electric customers who switched to a competitive electric supplier paid $176.8 million more than if they had stayed with their utility company during the two-year period from July 2015 to June 2017.

“Competitive electric suppliers promise big energy savings but are actually burdening customers with hundreds of dollars in extra costs,” said AG Healey in a statement. “In two years, Massachusetts residents lost over $176 million to these predatory companies. I’m calling for an end to this industry because that’s the best way to protect our seniors, low-income residents, and minority communities from these persistent scams.”

According to the AG’s report, nearly 500,000 residents in the state receive their electricity from a competitive supplier, but certain communities are particularly hard hit. The report found that 36 percent of low-income households received their electricity from a competitive supplier, double the rate among other customers. The study found that competitive suppliers appear to have targeted low-income and minority residents in many of the state’s gateway cities including Worcester, Springfield, Brockton, Lynn, Lowell, Lawrence, Fall River, Quincy and New Bedford. Participation was greatest in zip codes with the highest percentage of low-income and minority populations.

“Door-to-door competitive electric suppliers have been such a problem in our city that the Quincy Police Department has issued warnings to the public,” said Quincy Mayor Thomas Koch. “For too long, these companies have sold Quincy residents, particularly seniors, a bill of goods. I am proud to join with Attorney General in an effort to stop these scammers.”

“The competitive market for electricity was supposed to lower prices for households in Massachusetts, but for years it has done the opposite," said Jenifer Bosco, staff attorney at the National Consumer Law Center in Boston.

In Massachusetts, residential customers, such as commercial and industrial customers, can “shop around” for electricity rates. Customers can choose to get their electric supply from their utility – National Grid or Unitil or Eversource – or from a “competitive supplier.” When customers do not choose a supplier, they receive "basic service" electricity from their utility.

The AG's report found that the average low-income customer enrolled with a competitive supplier paid $231 more than if the customer was receiving their electricity from their utility company. The report found some low-income households lost more than $541 by switching to a competitive supplier.

In the last three years, the AG’s Office has received more than 700 complaints about competitive suppliers engaging in aggressive and deceptive tactics. Complaints include suppliers pretending to be a utility company to induce customers to turn over sensitive information; suppliers harassing customers with repeated calls or home visits; and door-to-door salespeople forcing their way into elderly customers’ homes and refusing to leave without a signed contract.

View the AG’s report here.

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