NEARLY TWO MONTHS after the Senate followed the House in passing sprawling energy affordability legislation that lays the foundation for a crackdown on competitive electric suppliers, the industry’s opposition to the measure is starting to come into clearer view.
The Retail Energy Supply Association and Retail Energy Advancement League, which share member companies like Constellation, NRG, and Shell that generate or purchase electricity to sell directly to customers, have spent a combined $80,000 in lobbying through the first half of this year — about as much as the Greater Boston Chamber of Commerce and Associated Industries of Massachusetts have each spent on all the issues they lobby for or against on Beacon Hill.
That would put the groups on pace for $160,000 this year, the most since REAL launched in 2022 and since RESA started lobbying in Massachusetts in 2018, state records show. The two groups have combined to spend roughly $1 million lobbying state government since 2018.
Plus, the energy companies and their trade groups are drawing lawmakers’ attention to a new poll that ostensibly shows the industry’s popularity among Bay Staters, said Frank Caliva, RESA’s national spokesperson. That poll of 500 Massachusetts ratepayers, commissioned by RESA, was released just days before the Senate voted on its energy bill and found that about 9 in 10 respondents support “maintaining the ability to choose their electric supplier.”
The pushback comes as Democrats on Beacon Hill are on the cusp of a long-sought breakthrough to rein in what critics contend are shady energy companies that rip off unwitting customers by signing them up for electricity at a reduced cost only to then raise prices later.
The industry is supporting a slew of reforms — including stricter oversight for direct sales to customers and removing certain customer fees — put forward by Gov. Maura Healey and advanced by both the House and Senate. But a new effort this year to grant individual municipalities the ability to ban the companies from directly selling to customers is a bridge too far, Caliva said.
Even as the industry has beaten back past attempts to ban it from selling to consumers, this new proposal gaining traction means this moment is different, he added.
“We are certainly very concerned about this bill, and I think the risk here is pretty significant,” Caliva said in an interview. “We are trying to sound the alarm that even this version of the approach, which is different than an outright state ban, will have significant negative repercussions for the market. There’s really no equivocating about it: It’s a concerningly fraught moment.”
Both chambers advanced language that would allow municipalities to vote to ban competitive electric suppliers from selling directly to individual customers in the face of scathing reports that they lure consumers into enrolling in too-good-to-be-true electricity contracts. Lawmakers believe the move would save ratepayers hundreds of millions of dollars over 10 years, representing a concrete way to stem soaring energy costs.
The alignment on stronger-than-expected guardrails through this novel approach is even more notable given the deep divisions that have emerged regarding the shape of the rest of the sweeping energy legislation now under negotiation between the two chambers.
It’s a stark reversal from last session, when an effort to crack down on the industry failed in a contentious uproar that included allegations of conflict of interest against a key lawmaker amid a protracted legislative battle.
Larry Chretien, executive director of Green Energy Consumers Alliance who has long advocated for tougher measures against the companies, also known as third-party suppliers, said that the industry has been “effective” in stopping the Legislature from banning it in the past, but that now it should “adjust to reality” as the legislative compromise enjoys broad support.
“I just don’t know how you get that conference committee to do anything other than say, ‘Oh, let’s look at our language on this. Let’s look at your language. Oh, it’s pretty much the same,’” Chretien said. “Why would they do something different?”
In Massachusetts, residents can get electricity one of three ways: through their investor-owned utility, like Eversource and National Grid; a municipal aggregation program, if the customer lives in one of nearly 250 communities where such an option exists; or through a third-party supplier, which the state has allowed to directly sell to individual residents since the 1990s and compete with the utilities and aggregation programs.
Nearly 500,000 electric customers are currently served by third-party suppliers as of March, the most recent data from the state Department of Energy Resources.
Yet the attorney general’s office has found that the industry has engaged in widespread deceit, targeting vulnerable and lower-income populations with misleading marketing, costly contracts, and automatic renewals.
The industry has cost these customers $739 million in total net losses over the past 10 years, according to Attorney General Andrea Campbell’s latest report. At least 30 percent of low-income residents in the Boston neighborhoods of Mission Hill, Roxbury, Dorchester, and Mattapan are enrolled with third-party suppliers.
Campbell said in a statement that those figures only “exacerbate” electricity costs that are already staggering in Massachusetts — the price of electricity in the Bay State is roughly double the national average — and that she’s “eager to continue working with the Legislature to protect Massachusetts ratepayers from this predatory industry.”
In the last five years, the Department of Public Utilities has settled with eight different competitive suppliers, resulting in refunds for customers, bans on specific types of marketing, or, in one case, forcing the company to exit the market altogether for two years.
Caliva blamed “bad apples” for past harms committed by the industry but said these examples don’t justify “shutting down the market.”
The $80,000 in lobbying spent by the competitive suppliers’ two trade groups so far this year doesn’t count lobbying from those groups’ individual member companies, leaving the full scope of the industry’s influence efforts unknown until the next lobbying report is released, likely after lawmakers presumably reach agreement on a broader package and Healey signs it into law.
CleanChoice, a competitive supplier confronting an active state investigation into its marketing and advertising practices, has spent $27,500 on lobbying so far this year, roughly in line with what it’s spent in years past.
Constellation, NRG, and Shell have all spent around $50,000 so far on lobbying in Massachusetts this year, though those are large energy companies likely lobbying on multiple issues. That’s in line with what they’ve reported spending in previous years.
Individual third-party suppliers like NRG, Shell, and CleanChoice declined or didn’t respond to requests for comment.
Emily Kennedy, a spokesperson for Constellation, a member of both REAL and RESA, said that the company “supports competitive energy markets and policies that preserve customer choice” and opposes restrictions on Massachusetts residents’ ability to choose their electricity supplier.
The two Democrats leading the joint energy committee in the Legislature, Rep. Mark Cusack and Sen. Michael Barrett, did not comment on the lobbying push.
Past efforts to ban the industry from selling to customers statewide, initially led by then-AG Healey in 2019, have failed to advance.
Even if communities do vote to prohibit the suppliers through the legislative provision under consideration, the industry would still be able to operate in Massachusetts — just on a more limited basis.
Third-party suppliers would be able to contract with businesses and bid on contracts through municipal aggregation programs, a process by which a town or city purchases power in bulk from a competitive supplier to serve its residents.
Chretien said municipal programs are vetted and approved by regulators, are carefully crafted by local officials who in theory are looking out for their constituents, and are generally more stable long-term agreements that can be an attractive low-cost option. There more than double the number of residential electric customers in Massachusetts served by the municipal aggregation programs compared with those served by competitive suppliers.
“We’re not putting them out of business overall,” he said. “We’re just saying: Leave these poor residential consumers alone.”
For its part, RESA is supportive of provisions included in both the originaly energy legislation filed by Healey and the versions that have advanced in the Legislature that would prohibit automatically renewing customers without receiving their consent, bar cancellation or early termination fees, and raise fees for the companies to operate in the state, Caliva said.
That shows the industry is making a good-faith attempt to encourage commonsense reforms that can fix its reputation and root out problematic actions without impacting customer choice, Caliva said.
“People jokingly say, ‘Use a scalpel instead of a hammer,’” he said. “In this case, we’re saying, ‘Use a saw instead of a wrecking ball.’”
But, to Chretien, the industry’s charades have gone on too long. This time, he hopes the door is shut to its influence on Beacon Hill.
“I don’t know how the industry is going to persuade legislators to reverse direction now,” he said. “There’s an energy affordability crisis, and this is the most glaring opportunity to do something about it.”
