ATTORNEY GENERAL MAURA HEALEY is asking the state Department of Public Utilities to investigate whether competitive electricity suppliers are charging low-income customers unreasonably high rates and whether those higher charges are driving up the utility bills of all ratepayers.
Healey’s office has conducted two studies suggesting consumers who sign up with competitive electricity suppliers pay significantly more money than they would if they bought so-called basic service electricity procured by their local utility. One study said the extra cost to low-income customers totaled $57 million over a three-year period.
Healey is pushing legislation that would place an outright ban on competitive electricity suppliers, but the measure hasn’t made much headway yet on Beacon Hill. Now she is asking the DPU to investigate and possibly take action against the companies, which have been accused of targeting low-income customers, using hard-sell tactics, and making misleading sales pitches.
The Connecticut Public Utilities Regulatory Authority earlier this month proposed moving all low-income customers purchasing electricity through competitive suppliers on to basic service as soon as practical. The New York Public Service Commission barred competitive sales to low-income customers in 2016.
One interesting twist to Healey’s DPU argument is that the financial cost of overpriced electricity contracts doesn’t just impact the customer buying the power. In documents filed with the DPU, Healey said the agency should investigate whether low-income customers who purchase higher-priced electricity from competitive suppliers end up driving up the utility bills of everyone.
For example, qualifying low-income customers typically receive a significant percentage discount on their entire utility bill. The cost of the discount is paid for by all ratepayers. If the bill of a low-income customer is higher because the electricity being purchased costs more, the cost of the discount ends up being more, driving up costs for all ratepayers.
Healey says there are a number of other subsidy programs that operate similarly.
Competitive electricity suppliers have lobbied hard against Healey’s legislation and are likely to oppose her efforts at the DPU. One industry official said in an op-ed earlier this year that eliminating competitive electricity suppliers would limit customer choice. “Competitive and choice breed innovation,” he wrote.
Healey doesn’t see it that way. “For too long, our office has seen low-income residents in Massachusetts targeted by competitive suppliers and overcharged by millions of dollars on their electric bills,” she said in a statement. “These jacked-up costs harm not only these customers, but also all of our state’s ratepayers, and weaken our low-income support programs. We are calling on the Department of Public Utilities to protect our most vulnerable residents from these predatory companies and their deceptive tactics.”