Utility Rates: Consumers still losing money

Utility Rates

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BOSTON — Despite the rapid growth of municipal aggregation programs designed to improve choices for electric customers, state residents who contract individually with competitive electric suppliers are continuing to lose millions of dollars a year, according to a new report that was released recently by the state Attorney General's Office.

The report found that Massachusetts electric customers who switched to a competitive electric supplier paid $76.2 million more than if they remained with their existing service during the one-year period from July 2017 to June 2018. The new data brings the total net losses to $253 million for Massachusetts customers between July 2015 and June 2018. Low-income residents and communities of color are disproportionately impacted, the report found.

The new report expands on the original report on the industry that the Attorney General's office released in March 2018.

"Our concern remains that too many customers are being falsely promised big savings on their electricity bills and then overcharged month-after-month," Attorney General Maura Healey said in a statement. "The results of our new report highlight the need for legislation to protect real competition and stop these predatory companies from scamming residents in Massachusetts."

In January, Healey filed legislation that would ban suppliers from contracting directly with residential customers for new contracts after Jan. 1, 2020. The legislation would not change Massachusetts' cities and towns' municipal aggregation programs or the markets for commercial and industrial electric supply. The Attorney General's office serves as the state's ratepayer advocate.

SOME HIT HARD

Of the 500,000 Massachusetts residents that receive electricity directly from a competitive supplier, low-income minority residents living in many of the state's gateway cities including Boston, Brockton, Fall River, Lawrence, Lowell, Lynn, New Bedford, Quincy, Springfield, and Worcester are continuing to be hit particularly hard by these companies. Pittsfield is one of the state's Gateway Cities. Low-income households participate in the individual residential electric supply market at twice the rate of non-low-income households, and on average pay rates that are 25 percent higher. The new report found that low-income households lost an average of $166 in the one-year period from 2017-2018.

In the last four years, residents in Massachusetts filed more than 1,000 complaints with the AG's Office about competitive suppliers engaging in aggressive and deceptive tactics. Complaints include suppliers pretending to be a utility company to induce customers to turn over sensitive information; suppliers harassing customers with repeated calls or home visits; and door-to-door salespeople forcing their way into elderly customers' homes and refusing to leave without a signed contract.

As of 2019, over 120 cities and towns in Massachusetts provide electricity to their residents through municipal aggregation programs. Dozens more are in the process of setting up municipal aggregation programs—including Boston and Worcester—with the goal of providing competitive and often cleaner electricity options for residents.

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