MA Residents Lost $426 Million Through Competitive Industry Supply Contracts in the LAST 5 Years
Updated: May 20, 2021
On April 1st, 2021, Attorney General Maura Healey released a report finding that in the last five years individual customers who received their electricity from competitive suppliers paid $426 million more on their bills than they would have paid had they stayed with their utility companies. These harmful practices have affected approximately 450,000 individual residential customers in the state and have disproportionately burdened low-income residents and residents in communities of color.
The report’s findings highlight an urgent need to pass legislation refiled by AG Healey, Sen. Brendan Crighton, and Rep. Frank Moran that would ban these companies from signing up new customers, sending a clear statement that this behavior will not be tolerated in the Commonwealth.
“Attorney General Healey’s report sheds light on an unacceptable pattern of exploitation of low-income communities and communities of color by competitive energy suppliers. We in the legislature have not only the ability, but the responsibility to stand up to competitive electricity supplies and put an end to their exploitative practices,” said Representative Steven Ultrino (D- Malden). “The exploitation of vulnerable communities has no place in our Commonwealth. I’m grateful to the Attorney General and my colleagues in the House and Senate for filing this legislation to protect our most vulnerable communities from these predatory business practices.”
The AG’s report found that low-income customers are nearly twice as likely to sign up with individual competitive suppliers and that they are also charged higher rates than non-low-income customers. According to the report, higher earners who receive their electricity from competitive electric suppliers lose an average of $194 annually, while low-income customers lose even more—an annual average of $241.
The report also found that consumer losses in this market are disproportionately borne by residents in areas with a higher concentration of low-income and residents of color. In September of 2019 alone, Worcester residents collectively lost nearly $400,000 to competitive electric suppliers—more than any other city or town in the state. Residents in other diverse communities, such as Fall River, Lowell, Brockton, Lynn, and Lawrence lost more than $180,000 in the same month.
Over the last five years, the Attorney General’s Energy and Telecommunications Division has prioritized protecting Massachusetts’ residential electricity suppliers. The division has thus far recovered more than $15 million for Massachusetts customers harmed by these companies—including over $7.25 million from a settlement with Starion Energy in August 2020. The AG’s Office alleged that the company collectively charged more than 117,000 residents millions more on their electricity than they would have paid had they received electricity from their utility companies. Impacted customers will begin to receive restitution this month. The AG’s Office also secured #3.8 million in restitution through a 2015 settlement with Just Energy and returned $4.6 million to customers it alleges were harmed by Viridian Energy in a March 2018 settlement.
Residents in Massachusetts have filed more than 1,000 complaints with the Attorney General’s Office about competitive Suppliers engaging in aggressive and deceptive tactics, with complaints including conduct such as suppliers pretending to be utility companies to convince customers to provide sensitive information; suppliers harassing customers with repeated calls and home visits; and door-to-door salespeople forcing their way into elderly customers’ homes and refusing to leave without signed contracts.
Since AG Healey first called for reform in this market in 2018, other states including New York, Illinois, and Connecticut have taken steps to protect customers from these deceptive practices.
Any residents with concerns about these deceptive marketing practices should file a complaint at the Attorney General’s Office (at this link https://www.mass.gov/ago/consumer-resources/consumer-assistance/consumer-complaint.html) or call the customer hotline at (617) 727-8400.
Residents with questions can also contact the Consumer Division of the Department of Public Utilities at (877) 886-5066.