Is Competitive Supply Working for Residential Customers in Massachusetts?

The Massachusetts Department of Public Utilities (“DPU”) wants to know.  The DPU recently opened docket D.P.U. 19-07  to investigate whether improvements can be made to the retail electric competitive supply market in Massachusetts.  In opening the docket, the DPU posed over 20 detailed questions to stakeholders on which it is seeking comments by February 19, 2019.

Whether competitive supply markets are working for residential customers in Massachusetts is not a new question.  About five years ago, the DPU conducted a similar investigation in D.P.U. 14-140, which resulted in a series of orders meant to improve competitive supply markets, including through the creation of a “Competitive Supply Website.”  Most recently in that docket, the DPU established notification requirements and standards of conduct for door-to-door marketing campaigns in May of last year.  The DPU issued an Order in a separate docket in 2017 that established guidelines for proceedings investigating whether competitive supply companies have violated DPU consumer protections.

The current investigation responds to a March 2018 report issued by the Massachusetts Attorney General.  That report concluded that residential customers in the competitive supply market from July 2015 to June 2017 paid more for their electric supply than they would have paid if they had remained on basic service.  It also found that low-income customers make up a disproportionately large share of the residential competitive supply market.  As a result, it recommended eliminating the electric supply market for individual residential customers.  The National Consumer Law Center issued a report raising similar concerns last April.  The Massachusetts General Court, Joint Committee on Telecommunications conducted a hearing on this topic last May.

In its current investigation, the DPU proposes several actions it believes may improve the competitive market.  Those actions include proposals to increase use and awareness of the Competitive Supply Website; establish information requirements for automatic renewal provisions; compile and provide access to complaint information; and take a more proactive approach to oversight of marketing practices (by, for example, expanding standards of conduct and requiring reports from competitive suppliers regarding their marketing activities).  The DPU also intends to look at possible barriers to market efficiency, such as delays in the initiation of competitive supply due to billing periods and allowing enrollment in competitive supply without providing a distribution company customer account number.

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