BOSTON, MA (May 2, 2023) – Instead of encouraging electric utility ratepayers to save money by taking advantage of offers from retail energy suppliers that are below the utility’s rate in every territory across the state, today the Attorney General’s Office of Massachusetts recommended that the legislature eliminate the electric supply market for residential consumers.

An analysis using only the offers available on the state-managed website, EnergySwitchMA.gov, shows that if all Massachusetts customers had enrolled with the lowest available fixed-rate offer from a retail provider, Massachusetts customers could have saved $194,223,158 in April 2023.

The Attorney General’s recommendation was accompanied by a consultant’s analysis of the residential electric supply market in Massachusetts. Advertised as a 2023 update, the report does not include data past September 2021 and focuses on a limited period when utility rates were in decline. 

The report also fails to consider the value-added aspects and varying terms of service of many of the retail products in which customers are enrolled, including 100% renewable energy, unlimited usage, flat-rate bill, and free products with enrollment such as electric vehicle chargers, smart home thermostats and more.

In a competitive energy market, customers have the option and right to decide if they wish to pay a sometimes-higher premium for the additional derived value. Further, with the current level of market volatility, price stability achieved by longer term, fixed price contracts provide significant value to many Massachusetts electricity consumers. Unfortunately, in this report, the variety of plans customers enrolled in with retailers were compared against basic six-month utility service, providing a flawed comparison and skewed reporting to favor the utility.  

“I opt to pay a little more to get 100% clean energy from my current provider. There’s a benefit to having suppliers to choose from in electricity particularly when prices are posted online and it’s so easy to make comparisons. There may be some confusion on the part of legislators on how things are working or they may be focusing exclusively on price and not any other considerations,” Larry C., South Weymouth, MA.

This comes on the heels of unprecedented utility rate shock during a time when retail energy suppliers are delivering significant relief to Bay Staters, providing stable alternatives to utility rates that have nearly doubled in the past year. 

2022-2023 Winter & Spring Rates for Massachusetts Residential Customers: 

Utility Supplier	Rate Term	Supply Rate	Rate Term	Supply Rate
NStar-Eversource	7/1/22 – 12/31/22	17.9 ¢/kWh	1/1/23 – 6/30/23	25.6 ¢/kWh
WMECo-Eversource	7/1/22 – 12/31/22	15.4 ¢/kWh	1/1/23 – 6/30/23	21.9 ¢/kWh
National Grid	5/1/22 – 10/31/22	11.5 ¢/kWh	11/1/22 – 4/30/23	33.9 ¢/kWh
Unitil	6/1/22 – 11/30/22	13.4 ¢/kWh	12/1/22 – 8/31/23	22.2 ¢/kWh

A six-month review of winter and spring rates shows that savings could have topped $1.1 billion. The average Eversource – NSTAR customer could see savings of over 50% on their energy bill by enrolling with the lowest available fixed rate offer. 

“I recently chose a set rate on a monthly basis because I knew I was going to have some fairly significant increase in my electricity use and I was able to lock in a price that works very well for me. After seeing the prices for Eversource in January went up to over 25 cents, that’s substantially higher than what I’m paying right now and to only be tied into one choice makes no sense to me. They need to talk to some of their constituents who use that and they need to understand it’s a really valuable tool that can save money in an environment where everybody is going through this inflationary period.” — Mike K., East Sandwich, MA

Fixed rates, long-term contracts, and unlimited usage plans help customers avoid rate shock and provide customers with options and a wide range of value-added products and services not included in default service. Currently over half of the offers available on EnergySwitchMA.gov are fixed-rate plans with prices beating standard utility service, and many are 100% renewable plans. 

“It’s shocking that the Office of Attorney General would recommend closure of a market so many Massachusetts residents have chosen to participate in and are benefiting from. We are supportive of market reforms to better protect consumers. As we have told them, we stand ready to work with the AG’s office, DPU, and the legislature on such market reforms that will prevent bad actors from freely engaging customers and enable suppliers who are following the rules to continue to serve the customers that chose to enroll with them,” said Chris Ercoli, President and CEO of REAL.

Last summer, more than 1,200 customers signed a petition telling their legislators to oppose any legislation that would close competition and remove their ability to access the variety of products available from retail energy suppliers. Many expressed concern that they would no longer be able to sign up for clean energy plans or would lose their ability to shop for the best electricity rates and fixed-rate contracts not currently offered by their utility. Others objected that ending competition would remove the utilities’ incentive to compete through lower prices and better service.

“I think you should listen to the people who have benefited from the competitive market and respect their wishes that there should be competitive options available.” —Young K., Brookline, MA

In January, Massachusetts lawmakers sent a letter to the Department of Public Utilities asking the agency to address rising utility rates. In the absence of proactive education to 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.

“The lack of customer education on their ability to shop is an issue. Price isn’t the only reason customers shop, but in the face of such significant rate increases and with the lack of resources and proactive customer education from the Consumer Advocate and state, we developed resources to help inform customers as they review offers and contract terms,” said Chris Ercoli, President and CEO of REAL. 

In late 2022, the Federal Trade Commission (FTC) announced that it was seeking public comment on potential updates to its ‘Green Guides,’ aiming to recalibrate its guidance following shifts in consumer expectations and stakeholder commitments around environmental commitments. Consumers are increasingly interested in and demanding access to less carbon-intense forms of energy, including renewable energy. 

In particular, the FTC’s Green Guides, which are a set of guidelines issued by the FTC to help companies avoid making false or misleading environmental claims in their marketing materials, are in the spotlight. Accurately and honestly advertising the environmental benefits of products and services can help deter greenwashing, a term used to describe the practice of misleading environmental claims. 

The FTC’s Green Guides are a critical resource that equips consumers with the information necessary to make informed decisions as they shop, looking to save money on their utility bills while promoting the use of renewable energy.

We applaud the FTC for taking action to update the Green Guides and strongly support the efforts to help marketers ensure that the claims they’re making promote competition, protect consumers, and have a tangible environmental impact. REAL believes that there is a continuing need for the Guides, as they provide significant benefits to consumers.

Following unprecedented rate hikes in many states, many consumers are switching to retail energy suppliers to lock in lower, fixed rates and take control of their carbon footprint. Many energy plans offered by retail suppliers include 100% renewable energy, employing the use of renewable energy certificates (RECs) to represent carbon-free energy sourced by suppliers in these plans to meet the growing consumer preference for clean energy. Unfortunately, misconceptions surrounding RECs suggest that they might not actually help renewable energy deployment — but those concerns fail to recognize the fundamental understanding of RECs. 

Within the Green Guides, the current guidance in the Renewable Energy Claims section (§ 260.15) is satisfied by retail suppliers who provide renewable energy products by purchasing RECs with wholesale energy (i.e., “grid power”). This guidance has been consistently reinforced by state law and voluntary standards. 

In its comments to the FTC, REAL recommended that the FTC maintain the current guidance emphasizing the importance of REC ownership and retirement as the foundation needed to prevent deceptive renewable energy claims and marketing. 

REAL urged the FTC to avoid new restrictions on renewable energy claims that could conflict with state law or other existing standards and practices, such as prohibiting unbundled RECs, specifying that RECs must be procured from a particular location and others. Such guidance would create barriers in the voluntary market and would make it more difficult (if not impossible) for consumers to access renewable energy products.

Customer understanding is paramount to a healthy and sustainable marketplace for energy-related products and services. In its comments to the FTC, REAL recommended the addition of an example disclosure statement under the renewable energy claims section (§260.15) for voluntary renewable energy products sold to residential customers that include unbundled RECs. This disclosure would ensure customer understanding and knowledge of the energy products being purchased. Specifically, REAL recommended the following example for §260.15:

Example [X]: A company sells a voluntary renewable energy product by purchasing and retiring RECs in conjunction with wholesale energy and advertises its product as 100% renewable energy. If the company states that renewable electricity is being delivered to the customer’s home from a renewable facility, the claim would be deceptive. If the company explains that grid power is paired with RECs as in the following disclosure, then the claim that the customer is purchasing, buying, or using renewable energy would not be deceptive:

“Electricity purchased from your electricity provider is the product of a mix of energy sources delivered over a system of wires. You will not have electricity from a specific renewable generation facility delivered to your service address. Rather, the energy your home uses from the electric grid will be paired with renewable energy sources through the purchase of Renewable Energy Certificates (“RECs”). By purchasing and pairing RECs with your electricity services, you are using and receiving the benefits of renewable electricity. Increased demand for, and generation of, renewable electricity can help reduce conventional electricity generation from fossil fuels in the region where the renewable electricity generator is located, thereby reducing greenhouse gas emissions. It may also have other environmental benefits such as little or no regional air pollution.”

Since 2012, the Green Guides have been reinforced by federal and state policies and have had an impact on the flow of truthful information to consumers. The Guides have helped promote clear and accurate disclosure of environmental marketing claims, which has given consumers the ability to make informed decisions when shopping for energy products. The Green Guides have been instrumental in preventing deceptive claims from companies that make false or misleading statements about their products, thus protecting consumers from harm.

In conclusion, REAL strongly supports the Guides for the Use of Environmental Marketing Claims (“Green Guides” or “Guides”), Matter No. P954501. The Green Guides are a critical resource that equips consumers with the information necessary to make informed decisions as they shop for clean energy products. 

REAL believes that smart regulation and consumer protections are the foundation for a healthy market where states can capitalize on the innovations and customer demand driving our transition to a clean energy economy. We appreciate the FTC’s efforts to help marketers ensure that the claims promote competition and protect consumers, and we look forward to continuing to work with the FTC and other stakeholders to advance the development and modernization of American retail energy, unleashing the full benefits of competitive markets.