Markey targets competitive electric suppliers in FTC letter

The key question facing policymakers: how to ensure that consumers benefit from the electricity deregulation that took place roughly 25 years ago.

Although customers can’t shop around for a new electric utility, they can look for an alternative for the energy supply portion of their electric bills, rather than allow Eversource or National Grid to pick their suppliers. Healey and Campbell worry about bad actors preying upon unsuspecting buyers. Now, Markey is expressing his concern, along with two of his colleagues in the state’s congressional delegation, Senator Elizabeth Warren and Representative Ayanna Pressley.

In a letter issued on Monday, the three legislators asked FTC chairperson Lina Khan to investigate an industry that they say all too often misleads and overcharges “vulnerable consumers for a basic and essential service.”

Larger business customers have the means to shop around, and have seen savings as a result. But consumers, particularly those in low-income neighborhoods, have been approached by door-to-door salespeople promising a bargain. In many cases, the rates were essentially teaser prices to hook buyers and eventually adjusted upwards.

Over the years, complaints have poured in by the hundreds into the state attorney general’s office. When Healey led the office, she took enforcement actions against several of these firms while lobbying for a state ban.

As governor, Healey still supports blocking competitive electric suppliers from selling to consumers, as does Campbell. (Legislation to do so has been filed by Representative Frank Moran and Senator Brendan Crighton.) Campbell in May released a report showing consumers collectively paid $525 million more for power over six years than they would have paid if they stuck with their utilities’ default options.

As the issue gains traction on Beacon Hill, the suppliers are fighting back, through an industry group called the Retail Energy Advancement League. Members include some of the industry’s biggest players, such as Calpine, Vistra, NRG, Constellation, Shell, and CleanChoice. They recently handed lawmakers the names of 3,000-plus Massachusetts consumers who support supplier choice.

REAL argues the sector is being painted with too broad of a brush, and that customers can in fact save money by shopping around. The group counted 84 fixed-rate supply plans listed on the state’s EnergySwitchMA.gov website, as of Nov. 30, that were cheaper than the default utility rate. REAL backs a bill from Representative Tackey Chan to bring in additional oversight and market reforms.

In 2021, about 400,000 Massachusetts households used a competitive electric supplier, while about 1 million others got their supplies through a group contract managed for their city and town, known as municipal aggregation. Everyone else got the supplies offered by their local utility.

While this debate plays out in Boston, Markey hopes to turn up the heat in Washington.

“As colder weather approaches and competitive electric suppliers across the nation continue to prey on fears of high electricity bills, the FTC must signal it will not tolerate any inappropriate behavior from competitive electric suppliers,” Markey wrote in his letter to the FTC. “These suppliers continue to target vulnerable populations, engage in unlawful tactics, and dramatically overcharge consumers.”

Public Citizen, a national consumer advocacy group, has asked the FTC to impose stronger standards on marketing to help consumers make decisions based on price or on the amount of renewable electricity. That said, Public Citizen energy expert Tysom Slocum said he supports taking a two-track approach to reining in the industry: stronger federal standards combined with outright bans in states with a history of consumer complaints.

“The AG and others have made a pretty convincing case that the competitive electricity market in Massachusetts is beyond repair [for consumers], that the number of deceptive actors in this market has just become overwhelming,” Slocum said.

Larry Chretien, executive director of Green Energy Consumers Alliance in Boston, said his organization became involved in the municipal aggregation business in part because he believes it’s the only effective, reliable alternative to the default utility service for consumers. (The bill to ban competitive sales in Massachusetts would not apply to households in their town’s or city’s aggregation program.) Chretien hopes that the market’s shortcomings will be addressed in an upcoming climate bill under consideration on Beacon Hill, in which several pieces of energy-related legislation will be packaged together. “I…