Massachusetts Attorney General Publishes Report Demonstrating Retail Energy Supply Customers Saved $30 Million in 2023

April 3, 2024

Despite their own data and firsthand accounts from thousands of retail energy customers, Attorney General continues to advocate to close the market

BOSTON – The Massachusetts Attorney General released a report today 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. A monthly review of retail energy supplier offers posted on the state-managed shopping website, EnergySwitchMA.gov, showed that utility ratepayers who did not enroll with the lowest fixed-rate offer available on the site overpaid by $1.14 billion in 2023 alone.

The Massachusetts Attorney General has partnered with the Green Energy Consumers Alliance to advocate for the closure of the residential retail energy market and the instatement of municipal aggregation as the only option for customers to choose outside of their utility. According to their website, the Green Energy Consumers Alliance “pioneered Green Municipal Aggregation, and now serves 30 communities in MA & RI with more local renewable electricity than required by state law.” Only 176 out of 351 Massachusetts towns offer this option. If the market closure legislation (S. 2106, sponsored by Sen. Brendan Crighton and H. 3196 sponsored by Rep. Frank Moran) passes, residents in the communities without aggregation would be forced back to the utility when their current energy supplier contract ends.

In 2022, 408,000 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.

More than 3,000 Massachusetts residents have voiced their opposition to the proposed market closure legislation. Despite this direct feedback from constituents, the Attorney General, City of Boston and some legislators continue to claim that customers are not capable of shopping for their energy supply needs.

As Andy, a resident of Freetown, Massachusetts, expressed during the February 24th show of NightSide with Dan Rea on WBZ Radio, “I have been using that site [EnergySwitchMA.gov] for 5 or 6 years. I agree with the last gentlemen. I’ve got six months of college behind me and I seem to have no problems.”

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.

This news comes as National Grid announced their plans last month to increase rates by 12.7 percent to fund investments in infrastructure, not accounting for potential increases in supply costs. The Massachusetts Department of Public Utilities is considering a program to offset these increases by offering discounts to low-income customers for electricity and natural gas that will be paid for by all other residential ratepayers.

Rather than searching for new solutions to address rising costs to be paid for by ratepayers and taxpayers, REAL suggests the state educate customers on a current savings solution already available to them: reviewing their options and shopping for the best rate and plan for their household’s energy needs.

“The recent report misleads both the public and the state legislature,” said Christopher Ercoli, President and CEO of the Retail Energy Advancement League. “We’ve continued to share with the Attorney General that there are inconsistencies in reporting, including comparing basic power products from the utility to renewable products and value-added products from suppliers. Despite this, the data still shows that the competitive market shields consumers from rate shock, a crucial point the author fails to emphasize. Massachusetts customers have spoken loud and clear. They prefer the freedom to shop for power, rather than being subjected to price uncertainty and limited renewable options from the incumbent utilities.”

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.

The retail energy industry supports H.3155, sponsored by Rep. Tackey Chan, to improve oversight and consumer protections in the local electric market while preserving its benefits for local customers. 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

Additional information:

QUOTES FROM MASSACHUSETTS CUSTOMERS (view 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 March 11, 2024 there were 255 retail supply offers available across the territories above, including: