GOV. MAURA HEALEY, Attorney General Andrea Campbell, and Boston Mayor Michelle Wu are all on record as saying electricity retailers are the modern-day equivalent of snake oil salesmen who should be shut down because they use deceptive sales practices to sell homeowners overpriced electricity.
Electricity retailers for years have defended the notion of competition, but now they are mounting a more sophisticated counteroffensive on Beacon Hill that acknowledges serious problems within the industry. At a live-streamed press conference on Monday, a group called the Retail Energy Advancement League released a new national study extolling the virtues of competition, embraced legislation pending on Beacon Hill to weed “bad apples” out of the industry, and introduced two customers who were happy with the benefits choice was bringing them.
Christopher Ercoli, the president and CEO of the Retail Energy Advancement League, also took aim at the chief argument of Healey and Campbell, who claim consumers are collectively losing millions of dollars by purchasing electricity through retail suppliers rather than through their utility or municipality.
Ercoli said the analyses conducted first by Healey and now Campbell focus strictly on price, ignoring the other benefits the competitive market offers, including contracts of longer duration, contracts with 100 percent renewable energy, and contracts that fit the lifestyles of individual customers. He also said the price advantage of utility-supplied electricity claimed by Healey and Campbell was totally undermined this past winter when prices soared to record levels and competitive suppliers with more flexibility in structuring their products offered significant savings.
“It totally is apples meets oranges,” Ercoli said of the analyses by Healey and Campbell.
Retail electricity remains a foreign concept to most homeowners. Local utilities (Eversource, National Grid, and Until are the big ones) deliver electricity to customers and bill them. But customers are free to buy electricity in a number of ways – directly from retail electricity suppliers or indirectly through aggregation programs run by their municipality or six-month basic service contracts negotiated on their behalf by their local utility.
Healey, Campbell, and Wu have no problem with municipal aggregation or basic service, but they say abuses have been rampant with the retailers, especially those that make sales by knocking on the doors of customers. They back legislation to eliminate electricity retailers.
“This is not just a few bad apples,” testified Michael Judge, Healey’s undersecretary of energy, at a legislative hearing in June. “The consumer experience of being marketed these products is consistently awful.”
The retailers have hired lobbyists and PR people and launched a campaign to change the narrative. Most of the retailers are getting behind a bill filed by Rep. Tackey Chan of Quincy that, as the lawmaker said in an interview, would make the industry “responsible and accountable.” It would require retailers to post bonds worth $5 million, contribute funding to provide more oversight of their operations, eliminate early termination fees, tighten rules on door-to-door sales, and assess a fine of $10,000 per day for every license violation.
The retailers also commissioned a national study on retail electricity competition by Paul Hibbard, a former chair of the Massachusetts Department of Public Utilities who now works at the Analysis Group in Boston. Hibbard reviewed the good and the bad and concluded many states, including Massachusetts, used too light of a hand in regulating retail electricity markets.
“But doing away with retail choice – rather than improving it – would be a mistake,” he said in his report. “Don’t throw the baby out with the bathwater.”
The retailers also brought forward two customers who said they appreciate the choices the retail market offers. Most of those choices can be found on a website called Energy Switch Massachusetts, which compares the offerings to basic service and municipal aggregation, if it exists in the customer’s municipality.
Young Kim of Brookline said he has been “playing around” in the choice market for the last 10 years with success. When he moved from an apartment to a 2,000-square-foot house and purchased a plug-in hybrid electric vehicle, he signed up for a plan with Shell-owned Inspire Clean Energy that offers 100 percent renewable energy for a flat monthly rate of $80 for unlimited electricity usage. His plan is not listed on Energy Switch Massachusetts, but it is mentioned in the FAQ section of the company’s website with a number of caveats about pricing.
Kim said his unlimited usage plan was about to expire last winter when the war in Ukraine caused energy prices worldwide to skyrocket, but he called the company and they offered to keep him on the same plan at $90 a month.
“This is the power of the competitive market,” he said. “Shutting down the competitive market at this stage of the game is really kind of misguided.”