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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, according to a press release from the The Retail Energy Advancement League (REAL).
REAL is a national advocacy organization dedicated to the expansion and modernization of American retail energy markets. In many states, utility monopolies still control the electric market and customers can’t choose where they buy their electricity and gas. Recently legislators and even the AG's office in Massachusetts have moved to ban markets because some consumers have ended up paying higher than expected rates because a provider turned out to be uneconomic.
Consumers Speak
“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!”
Other Reforms Possible
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)
“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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About the Retail Energy Advancement League (REAL):
The Retail Energy Advancement League (REAL) is a national advocacy organization dedicated to the expansion and modernization of American retail energy markets. In many states, utility monopolies still control the electric market and customers can’t choose where they buy their electricity and gas.
Our organization was founded by a coalition of companies that believe 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.
