BOSTON — State Sen. Brendan Crighton (D-Lynn) testified Wednesday in support of legislation to ban competitive electricity suppliers that use predatory tactics to charge consumers more for their energy.
In a hearing before the Joint Committee on Telecommunications, Utilities and Energy, Crighton, Attorney General Maura Healey and other lawmakers spoke in support of the bill, which Crighton filed earlier this year.
“The dishonest marketing and unfair contracts used by this industry to take advantage of low-income, elderly, non-English-speaking households in the city of Lynn and across our state is shameful,” Crighton said. “This legislation … will put an end to these predatory practices and put hard-earned money back in the pockets of consumers.”
In 1997, the Massachusetts Electric Industry Restructuring Act was passed, allowing consumers to choose an electric service provider. While Healey said that this law was well-intentioned, the impact has been that competitive providers have targeted low-income and vulnerable customers, promising them lower rates and instead charging them even more than before.
“They go door to door, send letters in the mail and call over and over and over with promises of cheaper electricity or a locked-in low rate that they claim will save you money. They say that if you sign up and switch from your utility company, they’ll deliver you consistent savings and lower bills,” Healey said in the hearing. “My office released three reports, the most recent in April, analyzing whether the individual residential electric supply market in Massachusetts is benefiting customers. The answer continues to be no.”
Healey said that between July 2015 and June 2020, customers in the state who switched to a competitive supplier paid $426 million more than they would have if they stayed with their utility company. Between 2016 and 2020, one in three low-income households in Massachusetts signed up with a competitive supplier, nearly double the rate of higher-income households, and those low-income residents paid an average of $241 more each year for electricity.
She added that the negative effects of these suppliers were exacerbated by the COVID-19 pandemic, during which Massachusetts customers have fallen into arrears by $912 million.
Crighton said that in majority-minority communities like Lynn, 27 percent of households have an account with a competitive electric supplier, compared to 17 percent in other communities. In Lynn, over 8,500 residents had signed up as of September 2019.
“In this month alone, these households lost $206,000,” Crighton said. “No matter which factor we use to break down the numbers — poverty rate, race, language, status — it is clear the participation rates in these competitive electric supplier plans is disproportionately high in our most vulnerable communities.”
State Rep. Frank Moran (D-Lawrence), who filed an accompanying bill in the state’s House of Representatives, said that the predatory marketing by these companies had been allowed to go on for too long.
“It is time that we provide relief to those struggling because of these deceptive sales tactics,” Moran said.
