Local electric customers and advocates testified at a hearing held by House members of the Legislature’s Telecommunications, Utilities, and Energy Committee today, calling for a reformed and improved competitive retail electric market in Massachusetts, not a return to a utility monopoly that reduces consumer choice.
“I have been a proud consumer in the choice market for electricity in the town of Brookline for over 10 years. Recently, I bought an EV and found a supplier willing to give me a flat monthly bill no matter how much energy I consumed. It was an amazing value,” said Young Kim of Brookline. “I wanted to give the voice of the customer from a positive experience. I don’t think we should close the residential market. With the rise of EVs, heat pumps, and solar panels, I want every option on the table.”
Right now, nearly half a million Massachusetts consumers choose a competitive electric supplier rather than their default utility provider. Some shop for 100% renewable energy, some choose products that provide long-term predictability to their utility bills to protect from spikes like we saw this winter, and some seek out the lowest price available. New data released this week shows that Massachusetts residents could save as much as $42.6 million this month by enrolling with a competitive supplier.
“Customers choose competitive electric suppliers for many reasons: lower rates, predictable bills, or help meeting their household’s environmental goals. The stakes are high: hundreds of millions of dollars in consumer savings, and our ability to achieve our climate goals while maintaining reliability and affordability,” said Christopher Ercoli, President and CEO of the Retail Energy Advancement League. “Massachusetts cannot just throw up its hands and say customers aren’t able or smart enough to play an active role in their energy use, purchasing and management. If the retail energy market were to close, ratepayers would be beholden to utility-determined market rates. Options and freedom to choose is the best consumer protection possible.”
Under one proposal being heard by the Committee on Thursday, consumers would lose that freedom of choice at the end of this year. H.3196 would shut down the residential competitive retail electric market in Massachusetts, denying customers the ability to shop for an electric supplier that aligns with their economic and environmental goals.
Another proposal being heard by the Committee contains numerous reforms to establish greater regulatory oversight and consumer protections in the market, while preserving its benefits for local electric customers. H.3155 includes the ability to switch suppliers mid-billing cycle within three business days, parameters around customers on energy assistance programs, and requiring auto-renewal notices. It also includes requirements to help address bad actors in the market, such as requiring training and certification from suppliers, particularly around marketing practices, publishing complaints, and increasing fees for misrepresentation of the utility or town. The legislation would increase industry licensing fees to help fund these oversight and enforcement initiatives.
“Changes are needed to better protect customers, and failure to do so risks losing the opportunity to capture the benefits of retail choice for all consumers,” said Paul Hibbard, a former chairman of the Massachusetts Department of Public Utilities who recently authored a report that looks comprehensively at how different states address competitive electric markets. “Some states and advocates appear to lean towards doing away with retail choice due to a perception of low benefits and negative experiences with marketing and supply to residential customers — experiences that by and large can be cured through corrective program design, regulatory action, and education. But doing away with retail choice – rather than improving it – would be a mistake.”
At the hearing, experts and advocates spoke about the need to ensure that competitive electric markets can operate as a stronger tool for consumers to meet their individual goals while supporting the energy transition and our achievement of decarbonization goals.
“I care about electricity competition because I care greatly about decarbonization. Decarbonization is rightly a major goal of Massachusetts and retail electricity competition can be a big way to decarbonize affordably,” said John Hanger of Shrewsbury, a former Public Advocate for utility consumers in Philadelphia, former Commissioner of the Pennsylvania Public Utility Commission, and former Secretary of the Pennsylvania Department of Environmental Protection. “When discussing green power products, let’s also remember that utility default supply comes overwhelmingly from burning gas, which is the top cause of CO2 pollution in Massachusetts and on the US electricity grid. Unfortunately, recent problems with offshore wind procurement underline the challenge of cleaning up default supply. To accelerate affordable decarbonization, it is time to unleash and enable the retail customer to cut CO2 pollution.”