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As State Senate Seeks to Ban Consumer Choice in Electricity, Rep. Jeff Roy and House Leaders Are Standing Up for Consumer Savings from Retail Electricity

As the Massachusetts Senate votes today to ban consumer choice in electricity, leaders in the Massachusetts House are instead standing up for residents who want to shop for a better deal on their electric bill.

“It’s time to update the competitive retail supply law, but not to end it. My Committee, the Telecommunications, Utilities and Energy Committee, is working hard on legislation that would do just that,” said State Representative Jeff Roy (D-Franklin). “We are focused on reforming the market to better protect consumers from unscrupulous business practices. Like in any industry, bad actors in the competitive supply industry deserve to be punished, but we should not ban all companies. I support the creation of the state Office of Retail Market Oversight, with the ability to enforce regulations and provide greater transparency for consumers. This will allow law enforcement to continue its progress by providing more tools and more resources. This is the better way. Let’s improve the market, not end it. Let’s protect competition, not eliminate it. And let’s continue giving customers the choices they deserve to save money and to achieve their climate goals.”

Legislation being voted on in the State Senate today would shut down the residential competitive retail electric market in the state, denying customers the ability to shop for an electric supplier that aligns with their economic and environmental goals.

“Senate bill 2738 proposes to ban consumers from shopping for an electric provider, leaving millions of Massachusetts residents stuck paying higher rates to their utilities,” said Christopher Ercoli, President and CEO of the Retail Energy Advancement League. “Customers that shopped last year saved significantly on their electric bills. Rather than working with industry on stronger regulations and consumer protections, this bill unjustly strips these residents of their ability to find better rates, 100% renewable energy offerings, or other electric products that align with their economic and environmental goals.”

While State Senators are seeking to shut down the entire competitive electric market, the retail energy industry supports legislation in the House, H.3155, sponsored by Rep. Tackey Chan, to improve oversight and consumer protections in the local electric market.

Proposed reforms include:

  • Creating an office of Competitive Market Oversight with additional staff to oversee the market and enforce regulations, funded by a fee on the retail energy suppliers
  • Enabling customers to switch suppliers mid-billing cycle within three business days
  • Establishes guidelines for customers on energy assistance programs
  • Mandating auto-renewal notices
  • Tackling issues related to bad actors in the market by requiring supplier training and certification
  • Enhancing transparency by publishing complaints
  • Increasing industry licensing fees to support oversight and enforcement measures
  • Requiring disclosure and reporting of voluntary renewable energy credits to the state

“We commend Telecommunications, Utilities and Energy Committee Chairman Roy and Representative Chan for championing common sense reforms, protecting their constituents, and ensuring they have options at a time when energy prices are at an all-time high,” said Ercoli.

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Massachusetts Electric Consumers Criticize Bill that Would Shut Down State’s Retail Electric Market, Return State to Utility Monopoly

Thousands of retail electric customers want to continue shopping for savings or for value-added products like 100% clean energy.

BOSTON – Massachusetts electric consumers today sharply criticized legislation, scheduled for a vote in the State Senate on Thursday, that would shut down the residential competitive retail electric market in the state, denying customers the ability to shop for an electric supplier that aligns with their economic and environmental goals.

“I’ve saved thousands of dollars by locking in rates for multi-year periods. Anyone can be taught how to do this in 5 minutes,” said Robert Pistey of Quincy. “Removing a choice of suppliers and competition is senseless and re-establishes monopolistic pricing. Why would we want to move backwards?”

In 2022, 408,000 Massachusetts residents chose to enroll with a competitive electric supplier over their default utility supplier. Their motivations varied, from seeking better rates and more predictable billing with flat monthly bills to accessing 100% renewable energy offerings and enjoying value-added offerings like free nighttime charging for electric vehicles.

“We were glad to lock in a kwh price with Constellation after such a spike in National Grid rates last fall,” said Edith King of Burlington. “Of course prices will be better if there is choice in the marketplace. Please don’t take the power of choice away. It is expensive in the Commonwealth as it is, and energy is a necessity.”

The market closure legislation, S.2738, would ban Massachusetts consumers from signing up with a competitive retail electric supplier starting in January 2025. Instead, residents would be forced back to their local utility when their current energy supplier contract ends. While some Massachusetts communities have ‘municipal aggregation’ plans that would be permitted under the law, the majority of the state’s cities and towns do not have this option, and consumers in those communities would face a total utility monopoly.

“This program, allowing one to choose the power source for electricity coming into the home, has been very important because it allows for the usage of green energy sources at a very competitive price,” said Stephen Ferrarone of Leverett. “I am opposed to seeing this program end and would urge the Commonwealth to continue with it.”

Over 3,000 Massachusetts residents have voiced their opposition to similar proposed legislation (H. 3196, sponsored by Rep. Frank Moran, and S. 2106, sponsored by Sen. Brendan Crighton) aiming to shut down the residential retail energy market. These residents are urging their elected officials to safeguard their right to choose an electric supplier in line with their personal economic and environmental objectives.

“The people of Massachusetts should have the right to shop for the best electric company! I believe in renewable energy, which is why I picked Clearview Energy as my supplier of electricity,” said Marilyn Morgan of Franklin. “We the people shouldn’t have our rights taken away, in regards to choosing our own supplier of electricity! It’s not fair!”

Rather than shutting down the entire competitive electric market and losing its benefits for consumers, the retail energy industry supports H.3155, sponsored by Rep. Tackey Chan, to improve oversight and consumer protections in the local electric market. Proposed reforms include:

  • Creating an office of Competitive Market Oversight with additional staff to oversee the market and enforce regulations, funded by a fee on the retail energy suppliers
  • Enabling customers to switch suppliers mid-billing cycle within three business days
  • Establishes guidelines for customers on energy assistance programs
  • Mandating auto-renewal notices
  • Tackling issues related to bad actors in the market by requiring supplier training and certification
  • Enhancing transparency by publishing complaints
  • Increasing industry licensing fees to support oversight and enforcement measures
  • Requiring disclosure and reporting of voluntary renewable energy credits to the state

“I’ve used 100% clean energy for years, and, since it’s totally optional for customers, I don’t understand why you would shut off this important option to consumers,” said James Fesler of Waltham. “If there are issues with some energy providers being bad actors, it’s best to regulate or deal with them and not totally close down the options to choose clean energy.”

Background on Shopping for Electricity in Massachusetts

In Massachusetts, customers can shop for the supply portion of their electric bill. The Commonwealth-managed website www.EnergySwitchMA.gov lists available offers so customers can compare and find a supplier that aligns with their economic and environmental goals.

In 2023, utility prices were wildly unpredictable. The cost of supplying electricity changed frequently, with National Grid’s residential supply rate going from 33.9¢ kWh to 14.1¢ kWh and then back up to 18.2¢kWh in a three-term period. This volatility hinders customers’ ability to budget and limits predictability in billing. An analysis of 2023 Massachusetts utility ratepayer costs shows that consumers on default utility service could have collectively saved as much as $1.14 billion in 2023 had they shopped on EnergySwitchMA.gov and enrolled with the lowest-cost competitive retail supply offer.

Background on the MA Attorney General’s Report

The Massachusetts Attorney General released a report earlier this month demonstrating that Massachusetts customers enrolled with a retail energy supplier saved $30 million in 2023 compared to customers on utility service. Even greater savings would have been realized had all utility ratepayers shopped for the supply portion of their electric bill.

The Attorney General has contracted a consultant to publish a report critical of the competitive retail electric market for the last several years. The Retail Energy Advancement League (REAL) has raised concerns publicly and directly with the Attorney General’s staff regarding the methodology and transparency of this type of reporting.

For example, the report:

  • Compares the price of a standard 6-month contract for utility customers with the prices chosen by customers in the competitive market for various shorter or longer-term plans, ranging from 3 months to 3 years. However, due to market volatility, longer-term fixed-price contracts offer significant value to many Massachusetts electricity consumers, making direct comparison with a 6-month contract inaccurate.
  • Compares utility basic service with value-added retail products that customers opt for, paying a higher rate/kWh. These products include 100% renewable energy, unlimited usage, flat-rate billing, and free products like electric vehicle chargers and smart home thermostats upon enrollment. In a competitive energy market, customers have the choice to pay a premium for features they value, such as clean energy or predictable bills.

Even with this flawed methodology, the inclusion of customers that chose to enroll in premium products, and additional concerns raised in a 2023 letter from REAL to the Attorney General’s staff regarding the collection of data used in the report, the savings in 2023 were significant.

Next door in Connecticut, according to the Office of Consumer Council, the state’s 265,000 retail energy customers also experienced significant savings of $107 million in 2023. Again, this reporting does not account for value-added products or varying contract terms compared to the utility.

The Attorney General has pointed to customer complaints as the driver for their efforts to close the market. In fact, their office received just 79 complaints in 2023, a 57% decrease since 2019. In contrast, 526 complaints were filed by customers about the state utilities. In a 2023 report, the Attorney General’s office listed the top 10 industries by complaint volume, with healthcare services ranking highest, followed by travel, landlord-tenant issues, auto repair, used car sales, home improvement, health insurance, auto and home insurance, rooftop and community solar, and home appliances. Retail energy suppliers did not make the list.

Additional Quotes from Massachusetts Customers (view hundreds more)

If you would like to interview a customer in your readership area, please contact Andrew Farnitano at 925-917-1354 or andrew@crawfordstrategies.com.

“I never had any negative experiences with energy suppliers, even when I changed from one year to another. Having the opportunity to make the wisest decision for my family is undeniably the way consumer commerce works,” said Linda Kauss of Rockport. “Choosing the best rate is a top priority. It appears National Grid is trying to limit competition. It has never been a problem making a decision to choose a supplier, National Grid is fabricating the notion it’s too difficult to make a choice and there isn’t any benefit.”

“I already choose an energy provider that is not my local utility so that I can buy 100% renewable energy at a reasonable price,” said Adam Mercer of Needham. “Please don’t limit this competition.”

“I have been using alternative suppliers for approximately ten years. During that time I have enjoyed significant benefits that have resulted in excess of a thousand, possibly thousands, of dollars,” said John Heath of Saugus. “Each time my contract term is about to expire I am notified by the supplier and I use the available websites to search for rates and the best deal for me. I have never felt misled or cheated and on at least 2 occasions when rates were lowered during my contract term I contacted the supplier and they lowered my rate further.”

“My choice of an alternative energy source is saving me about $200 a month,” said Elizabeth Brown of West Bridgewater. “A difference much appreciated by this 85-year-old widow.”

Massachusetts Energy Market Data

2022 residential customer enrollment data from Massachusetts DPU:

  • 2.4 million households on utility default service (Eversource, National Grid or Unitil)
  • 1 million households enrolled in the Municipal Aggregation selected retail energy supplier
  • 408,000 households enrolled with an individual retail energy supplier
  • 50 Municipal Light Plant towns where customers must purchase electricity from the plant owned by the town
Shopping Resources

In the absence of proactive education for ratepayers about their options to shop, the Retail Energy Advancement League developed a shopping guide to help customers navigate the EnergySwitchMA website with explanations of contract terms and helpful shopping tips.

REAL also produces a monthly summary of offers in the market that customers can subscribe to receive. As of April 5, 2024 there were 281 retail supply offers available across the territories above, including:

  • 141 fixed price offers, cheaper than the default utility rate
  • 135 100% renewable offerings
  • 122 100% renewable offerings cheaper than the default utility rate

Massachusetts residents could save as much as $76,419,441 this month by enrolling with a retail supplier.

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Energy News

SB1 Veto Letter to Governor Moore of Maryland

Maryland, State House, Energy Choice

The Honorable Wes Moore

100 State Circle, 2nd Floor

Annapolis, MD 21401

Dear Governor Moore:

On behalf of the Retail Energy Advancement League, a coalition comprised of retail energy suppliers operating throughout Maryland and the United States, we are writing to urge you to veto Senate Bill 1 and instead ask the Maryland Public Service Commission to exercise its jurisdiction in furtherance of the legislation’s purported goal of consumer protection. SB 1 is detrimental to Maryland consumers, businesses, and environmental sustainability. We anticipate that if this legislation is enacted into law, it will drive businesses away from Maryland resulting in the loss of thousands of jobs, an increase in energy costs, and severely constrained consumer choices.

Senate Bill 1 poses a significant threat to Maryland for the following reasons:

It is a de facto ban on retail services for residential customers

This bill, taken as a whole, implements a price cap currently lower than the incumbent utility and implements provisions that make it more expensive to conduct business. These provisions include limits on the maximum contract length for all residential electric and gas retail products to twelve months, removal of the purchase of receivables, and prohibition on automatic renewals for renewable electricity offers. This will make Maryland too expensive for our members to participate in the residential retail market.

It restricts innovation and business investment and undermines the State’s efforts to attract innovation and business investment.

Our members and other retail suppliers cannot offer residential products under the unprecedented constraints in this SB 1, which do not exist in any other state. In addition, the consequences of SB 1 extend far beyond competitive energy suppliers, reaching deeply into the fabric of our local economy. Countless businesses that rely on partnerships and contracts with these suppliers face an uncertain future. The potential fallout includes downsizing operations, leading to the loss of Maryland jobs and vital tax revenue streams. The repercussions of such actions would reverberate throughout our communities, exerting undue strain on both employers and employees.

It is counter to what nearly a half million Maryland consumers have said they want.

This legislation will affect nearly half million Maryland consumers who have chosen their energy providers—some of whom will be returned to standard offer service immediately and others who will lose their choice to renew or enter a new contract.

Long-term fixed contracts have been critical to protect consumers from regular utility rate increases and to provide consumers with the comfort of knowing what to expect month-over-month and year-over-year. However, this legislation will bring an end to this option.

Many Maryland consumers have benefitted from 100% renewable energy (when utility supply comprises only 37% renewable energy, on average), free electric vehicle (“EV”) charging equipment, and innovative time-of-use (“TOU”) programs. If SB 1 is enacted, Maryland consumers will not be able to benefit from these products or value added benefits. This legislation forbids the sale of any products priced above the utility rate. Unable to price adequately, it is unrealistic to expect or assume that suppliers will offer these products at a loss.

It undermines Maryland’s ability to meet its ambitious 2050 climate goals.

A few of the products that will be blocked from the market include:

  • Green Mountain Energy – All Nighter for EVs
    • Customers in the BGE market receive electricity generation that includes a 10% Solar Renewable Energy Credit (“REC”)-based plan (90% Wind) and lower electricity prices at night from 10 PM to 7 AM.
  • Inspire Clean Energy – Power Local
    • Customers in Maryland can select a plan that purchases RECs from specific regional wind farms. Power Local provides greater transparency and gives customers the opportunity to support local clean energy development.
  • Ambit Energy – Winter Break 12
    • Customers automatically receive a 50% discount off energy supply charges on bill cycles beginning November 1st through the end of February.
  • CleanChoice Energy – Google Nest Thermostat or Google Nest Hub 2
    • Customers will receive a Google Nest Thermostat or Google Nest Hub 2 in the mail if they are enrolling in new CleanChoice Energy service.
  • NRG – EV Power Charger Plan
    • After two months of service, customers in the BGE service territory will receive an Emporia EV L2 charger with TOU pricing and reduced electricity supply rates during off-peak hours.

Lastly, there are existing and forthcoming Maryland Public Service Commission (“PSC”) regulations.

SB 1 is an unnecessary intrusion into the authority and existing work of the PSC. Regulations are already in place to protect consumers from misleading and deceptive practices, ensure that consumers are knowledgeable about the energy products they choose, and require adequate notice to energy customers when their contracts are nearing their end. The PSC is currently working to identify and implement additional consumer protections and examine the purchase of receivables program in consultation with a variety of stakeholders. In 2023, the PSC launched a “maximum enforcement” campaign with the goal of investigating and prosecuting retail suppliers. These efforts contributed to a steep and sustained decline in consumer complaints between the first and second halves of 2023. We anticipate this will continue downward. We believe any consumer protection concerns will be highlighted and addressed through the PSC.

SB 1 significantly disadvantages consumers and businesses in Maryland. Despite the impassioned efforts of thousands of Maryland residents and employees communicating their apprehensions to elected officials, their voices continue to be unheard. For these reasons, we urge you to veto this legislation. We continue our commitment to remain at the table for ongoing and meaningful conversations to identify and address any gaps in consumer protections.

Sincerely,

Christopher Ercoli
President and Chief Executive Officer
Retail Energy Advancement League