The following blog post was originally pLarry Chretien & Mikaela Hondros-McCarthy on Tuesday, May 09, 2023.
Regular readers of our blogs know where we stand on options consumers have for receiving power supply. To recap: For customers of investor-owned utilities, you are better off, and the planet is better off if your community has green municipal aggregation than if you are on the utility’s Basic Service. And more than likely, you are going to pay more than you should if you choose a competitive electricity supplier on your own.
We’ve been harping about how bad those predatory competitive power suppliers are, often citing reports from the Massachusetts attorney general’s office. But just last week, Attorney General (AG) Andrea Campbell released a fourth report showing solid evidence that over six years, from July 2015 to June 2021, consumers paid $525 million more than if they had received supply from their utility (National Grid, Eversource, or Unitil). Overall, the approximately 430,000 individual residential customers in the state who are currently enrolled with competitive suppliers lose $231 a year, on average. Even worse, low-income customers and people of color were more likely to be ripped off than the overall population.
In a statement, the AG’s office said, “Today’s report highlights the urgent need to pass legislation that AG Campbell, Senator Brendan Crighton, and Representative Frank Moran filed earlier this year that will ban these companies from signing up new individual residential customers in Massachusetts.”
Green Energy Consumers Alliance applauds AG Campbell and her predecessor (now Governor Healey) for their work on this issue. We enjoyed seeing this table, which shows how consumers are generally moving away from Basic Service and competitive power supply to aggregation.
And this week, WBUR’s Miriam Wasser is writing a series of stories about this market. Start with “Why a plan to drive down electricity prices in Mass. led to higher bills.” Then move on to “Tips to avoid losing money or getting scammed by electricity suppliers.”
If that’s not enough for you, we have these points to share:
- The AG’s report looked at data through June 2021. As of December 2022, the trend away from competitive suppliers and Basic Service to municipal aggregation has continued. In December 2022, 43% of non-low-income residential consumers were served by an aggregation and 32% of low-income residential consumers were served by an aggregation.
- The AG’s report compares utility supply only to competitive power supply chosen by individuals. It does not compare to the rates charged by municipal aggregators. There are about 170 cities and towns with operational aggregations currently, with a total population of about 4 million people. As we have reported, a large cohort of communities with what we categorize as “Green Municipal Aggregation” saved consumers an average of $78 per year compared to utility Basic Service before this past winter when utility rates skyrocketed. Do the math: Basic Service is cheaper than competitive supply by $231. That means municipal aggregation is about $300 cheaper per year than the individual competitive power supply market – for much greener power! During the winter price spike, the average supply rate paid by communities with the green municipal aggregations that we have studied was less than half the rate for Eversource basic service customers and about one-third of the rate for National Grid customers. Although that winter price spike was not permanent, we estimate that aggregation customers saved between $430 and $650 in that six-month period – while getting greener energy.
- The University of Massachusetts at Amherst studied the market and came to a similar set of conclusions. Results of their study show that 79% of municipalities achieved savings compared to utilities’ monthly basic service rates, with an average savings of about $93 per household, per year.
What To Do About All This
- Pass the bill referenced above sponsored by Senator Crighton and Representative Moran: SD648 / HD3214, An Act relative to electric ratepayer protections. Competitive suppliers should not be allowed to sign up new residential customers. They should continue to be allowed to serve commercial and industrial customers and to bid on municipal aggregation contracts.
- The Mass. Department of Public Utilities must clear out the unforgivable logjam of approvals for communities waiting to start their municipal aggregations. There are about 20 communities waiting, some for over two years!
- Pass the bill sponsored by Rep. Tommy Vitolo and Senator Jason Lewis to “reset” the Department of Public Utilities guidelines for approving municipal aggregation proposals: S.2145 / H.4266, An Act supporting electrical load aggregation programs in the Commonwealth.
- Basic Service supply offered by utilities is not good enough. It costs more than necessary and doesn’t have enough renewable energy.
- Supply offered by competitive power suppliers to individual consumers is even worse.
- Municipal aggregation is best – that’s the ticket!
- It’s time for the state government to make aggregation an energy priority.