Well-intentioned law has been corrupted by con men
By: Daniel Stevens, CommonWealth, July 14, 2018
As summer swings into high gear, our electric bills do, too. Modern life dictates that we need power to keep us cool. To try and reduce electricity prices for people living in Massachusetts, a few years ago, the state Legislature created a program called the competitive electric supply market, giving residents options to choose their electricity company.
According to Maura Healey, the Attorney General of Massachusetts, between 2015 and March of this year, residents who abandoned the state’s utilities paid more for their power than they would have if they had stayed put. At a press conference calling for the termination of the competitive electricity program, the Attorney General said: “In two years, Massachusetts residents lost over $176 million to these predatory companies. I’m calling for an end to this industry because that’s the best way to protect our seniors, low-income residents, and minority communities from these persistent scams.”
The problem with the competitive electric supply market is shady power companies use door-to-door salesforces that promise their customers lower energy prices but fail to deliver. What is so tragic about this situation is that the fraudster energy companies are targeting the least sophisticated customers who can ill afford to pay higher electricity prices. Sadly, Massachusetts isn’t the only state in New England dealing with the problem of disreputable electricity companies.
Recent reports out of Maine detail a class-action lawsuit filed against a company called Electricity Maine. The suit alleges that employees from Electricity Maine went door-to-door in several cities posing as auditors for the Central Maine Power Company, the regional utility. These “auditors” stated they were there to ensure customers were not being overcharged. Then, these fake auditors convinced customers to sign up for power from Electricity Maine, a company that charges more for electricity than Central Maine Power. In fact, according to media reports, customers in Maine “from 2012 to 2016 paid $77 million more to retail suppliers than they would have under the standard rate negotiated by regulators.”
My organization, a corporate and government watchdog, is no stranger to businesses in the electricity markets that rip off their customers. For two years now, we have been closely tracking rooftop solar companies. Similar to how the competitive electric supply market created opportunities for crooks to overcharge people for electricity, government incentives for putting solar panels on homes also created an industry of bad actors that mislead customers on the savings they will accrue with rooftop solar panels.
Despite the leadership from Healey to protect customers from crooks that sell overpriced electricity and rooftop solar panels, neither Gov. Charlie Baker, nor the Legislature, have taken any serious steps to protect consumers in their state from shady salesforces in the electricity markets. The legislators will likely adjourn for the year soon. Before they do, we hope they will take up efforts to protect consumers, so residents of Massachusetts won’t have to spend millions of more dollars on overpriced electricity.