InFocus featuring Larry Chretien (Predatory Electric Suppliers)

From the 22 News Plus studio, this is 22 News In Focus with Patrick Berry. Hello everyone and welcome to this edition of In Focus. I'm your host Patrick Berry. Probably one of the hottest topics across the state of Massachusetts right now are our utility rates. I came across an article not too long ago about something called, I'm going to read my notes here, predatory electric suppliers. Never heard of this. I live in Westfields. We've got the Westfield Gas and Electric Company. There are a number of towns throughout our viewing area that have municipal electric suppliers, but most of us do not, which is why I have invited this gentleman to sit across the desk from me, Larry Christian. He is the executive director of the Green Energy Consumer Alliance. Larry, I cannot thank you enough for coming in and talking to me today. What is a, and I'm looking at it again, predatory electric supplier? Yeah, Patrick, thank you for having me. In Massachusetts, about 15% of the population is served by municipal utilities like Westfield or Chicopee, but 85% get their electricity from an investor-owned electric utility that is regulated by the state. It's a different story. Like who? Eversource, National Grid? And Unitil, which is in the Pittsburgh area. Eversource and National Grid are the biggest, and a lot of this area is served by them. So the way it works, there are three ways to get your electricity if you're in one of those 85% of the state. The utility always delivers the power, runs it through the poles and the wires, but you can get your supply from them through what they call basic service. That's the utility has gone out and they've bought the electrons to make your house light up. But alternatively to that, more almost, probably 80% of the state is now covered by a municipal aggregation. That's where the city or town has decided to buy the supply on behalf of its citizens and offer that to them. And people can choose between the municipal aggregation or the utility basic service. The municipal aggregation works really well. We'll get into that in a bit. The third way is that there are retail suppliers who are allowed to serve individual customers and they sign them up one at a time. And that's available to commercial customers and to residential. And what the data is showing that those customers who buy from a retail supplier separate from municipal aggregation or separate from their utility, they get ripped off 80% of the time. And so we call them predatory because they know what they're doing. They're charging way higher than either aggregations or basic service and it needs to stop. So I want to make sure I understand the bigger picture. And again, I'm kind of stuck because I live in Westfield. I've got a municipal electric supplier. But if I live in say, Springfield, which doesn't have a municipal that I know of. So if I'm a Springfield resident, I can either get my electricity directly from Eversource, I think is in Springfield. Okay. I can get it from Eversource, which is one way to get electricity. Alternatively, I could go with this aggregation, which would be what? Well, in that case, the city of Springfield has joined the club. They have a municipal aggregation and they buy electricity. They've procured a supply contract to offer to consumers. And the way it works is if you live in Springfield, you're in the aggregation unless you want to opt out. You can opt out without penalty. It's very consumer friendly, but you're in the buying club that way. So Springfield joins with other communities to buy? On its own, not with other communities. So in most cases, communities do it by themselves on Cape Cod. All the towns on Cape Cod are in one buyer's group. So Springfield's pretty big. So it's able to go out and they've chosen a supplier. And that's usually a three-year term. And you get a price that's good for that period of time. And in order for the supplier to get the contract to serve a town, they have to present a plan to the state. It had approved by the Mass. Department of Public Utilities. And like in Springfield's case, they wouldn't serve the city unless the mayor, for example, approved it. So there's a lot of oversight. People are looking at this. How many politicians want to choose the highest rate? They don't. So it's sort of a bid system in Springfield. So we put it out to Eversource. We put it out to this other group. Give us your best quote. That's right. And so the citizens of Springfield have, they're given the option of, okay, say Springfield as a government agrees to this aggregation method. Residents, you can choose that because we negotiated the best rate for you. Or if you don't want that, you can get from Eversource. That's right. Without penalty either way. Okay. And then there's this third group. The phrase predatory, third-party predatory providers. So it sounds as if they're doing kind of what the city of Springfield does, is they aggregate the power. They get the power from somewhere and then they come in and charge somebody for it. And they charge people one at a time. They enroll customers. So they market by using direct mail or they will, in many cases, they'll go to your door, knock on the door and put high pressure tactics on. They'll do telephone calls and they'll do all this kind of business. And so that's one reason why their costs are high because they have to cover their marketing costs where the aggregation doesn't have marketing costs to speak of. Right. And neither does the utility with the basic service. So actually I keep getting this mail from a company called Clean Choice Energy. It comes to my house and I read the fine print and the offer- It's always in the fine print. It's very small and I need glasses now. And the fine print says that they can raise the rate after 90 days. So they give you a come on rate. And actually, even the come on rate wasn't good. I'm paying less, live in Quincy, in Eastern Mass. And I'm paying less through the aggregation than National Grid would charge me. And this offer was higher. But then after 90 days, they could raise it again. Whereas I'm locked in for like three years in Quincy. So I'm looking at this and it's not appealing, but you know, they obviously sign up customers. I know that they do. It's someone who doesn't, is not aware of what their utility's charging. They're not aware what the city of Springfield's charging. And so our, thank you for having me. The point I'm getting at is if the message to anybody who does not have a municipal utility is look to see what your community has in terms of the aggregation price. Look to see what Eversource and National Grid, depending upon where you live, see what they're charging. And please just read the fine print. Just don't sign up with these competitive suppliers. They don't call themselves predatory. I do that. But the attorney general's office has done great work over many years. They do a study and they've calculated that people who choose a retail supplier end up losing eight times out of 10. Preston Pyshko Wow. We're up on our first commercial break. We're going to get into that data when we come back. Folks, stay with us. There's plenty more to talk about. This is 22 News In Focus with Patrick Berry. This is 22 News In Focus with Patrick Berry. Welcome back everyone to this edition of In Focus. Today we're talking about predatory electric suppliers. Something I had no idea about, but Larry Grecian from the Green Energy Consumer Alliance is here to explain it. You've done a phenomenal job breaking it down, making it very simple. But just before we went to break, you started to quote some data. And I want to pull up that slide now. So July 2024 to June 2025, people in Massachusetts, homeowners in Massachusetts lost more than $87 million to this practice. And then over the course of 10 years, it's been nearly $740 million. Yeah. And that doesn't include it. That was as of about a year ago. So you can add to the toll. And it's horrible. Now what's even worse is that's not spread across everybody in the state. That's about 18% of the population. So it's really concentrated on about less than a fourth of the households who could be affected. And so you break it down even further, what we learn is that it adds up to about $200 per household per year. Okay. Is this that second slide that I just pulled up now? Yeah. And that's what hurts the consumer. It adds up. We're trying to alert people. Imagine you might be paying $200 more than you need to for 10 years in a row. And that's a transfer of wealth from communities around this area, Springfield and many others. And that is going to the shareholders of whoever owns these electricity supplier companies. And it's leaving this community and it's hurting. Then there's more data. The attorney general's office digs deep. And they've done this for years when Maura Healey was the attorney general, she did it. And now it's attorney general Campbell continues to study. And that's why they both have argued to ban this stuff. But so if you look at it, it's people who are low income, people whose first language isn't English. And people who are elderly are far more likely to choose one of these electricity suppliers, unaware that it's going to cost them $200 more a month, more a year than otherwise. So the suppliers know this. And that's why they're going after folks who they might consider to be easy prey. So, and it looks like based on this next set of data that I brought up, for low-income families, your point, which you mentioned earlier, it's almost 30% of low-income families are involved in this? Yes, far more likely than someone like me or you. And that is, that's data that's been shown year after year after year. So that's, if we do nothing else, we should stop that, which is, and I have some good news on that in a minute. So if I understand the practice of these companies, I'm just going to use Springfield as an example. They will look at the layout of Springfield as a community, and they will know some of the more affluent, educated areas versus some of the lower income, lesser educated areas, and they'll target those areas. They'll go into those areas and say, hey, how much are you paying for electricity? They'll do a comparison and say, hey, you're paying, I don't know, making $200 a month. I can get you down to 150. But then in 90 days, it goes to 250. Yeah. So I got a solicitation in the mail where the fine print says they can raise the rate after 90 days. And that happens, that has been happening all across the board. And so that is why a lot of people miss that point when they sign up. They're not aware, and they may not check their bill. I have to admit, I don't look at my electricity bill every time it comes. I get it electronically now, right? Oh, yeah, absolutely. But I do know that I signed up for the right rate, which is why I can sleep at night. But it's the folks who, I think the suppliers know that the customer is not going to check. And I don't think that municipal aggregation has been around a long time. Most communities have had it for years. Springfield's relatively new, but it has one. And I just think a lot of people don't know that they have the aggregation as an option or the utility as an option. So where energy rates have just been in the news so much recently, this is a way the individual homeowner, because if I'm understanding this correctly, this is not something our local governments can control. This is something the homeowner has to control. So if somebody's knocking on your door, sending you solicitation mail, snail mail about offering you lower electricity rates, this is where the homeowner can take that step to save themselves money by just reading and being more informed. Exactly. And there's good news is the consumer has choice, but it requires paying attention and understanding. And that's what we're here to talk about, which is that you can make a choice here. And as I said to you earlier, energy is very complicated, but this one's simple. Avoid those suppliers who are trying to get you one at a time and just go with the aggregation if your community has it, or go with the utility basic service and break it down that way. With the Attorney General's Office study focuses in on the people who choose their own supplier, but we've done our own work at Green Energy Consumers Alliance and shown that the municipal aggregation tends to be cheaper than utility basic service over time. So there's the three ways. One's bad. Right. One's bad. Two are better. I want to bring up the pie chart you sent me. It is the average number of households enrolled in each electric supply. Tell me more about this. Yeah. So right now, over the last few years, municipal aggregation keeps growing. We keep adding communities. And this is statewide data. Statewide data. So for example, Springfield came on relatively recently. The city of Brockton is not yet, but it's making steps. Big city that will add to this. So that 51%, it's 1.3 million households. It keeps growing. The utility basic service number has been fairly stable at 31%. But the problem is over 400,000 customers are on retail competitive supply. It's 18% of the households. So it's concentrated on the problem of paying over $200 per year is on just 18%. So if you live in one of those communities, and there's five people on your street, probably one's getting ripped off. We are up on our second commercial break. Plenty more to talk about, folks. So stay with us. We're back in just a minute. Welcome back, everyone, to today's discussion here on InFocus about energy rates and how close to 20% of residents in Massachusetts are losing money every single year. I'm so excited today because sitting across the desk from me from the Green Energy Consumer Alliance, Larry Gretchen, who's their executive director, explaining predatory electric suppliers, a phrase I'd never heard about until just a few weeks ago. So thank you for making the drive out from Quincy to talk to me about this today. Looking ahead, what is happening either with your agency or state legislators, the governor's agency, you mentioned Attorney General Campbell's office, what's happening to protect us rate payers? Great question. The Attorney General's office, since Maura Healey was the Attorney General, has been asking the legislature to ban retail suppliers. They want consumers to go to either municipal aggregation or to stay on utility basic service. And that's been a bill that has floundered for years. The Mass. Department of Public Utilities has taken a strong position. They don't like retail suppliers. And they say, with all honesty, they just don't have the, they'll never have the resources to police this. These suppliers are all over the place. They talk to consumers one at a time. No one's there to watch it and to see what the come on is and all that. They support the ban, but it has to be done legislatively. And so we were very glad to see that the house in February didn't vote to ban, but they came close. And so I would prefer the ban, but what the house said was any city or town that wanted to ban retail suppliers could elect to do so at the local level. So the idea is at this point, it may move towards individual communities making decisions rather than a statewide decision. Correct. But even if they don't ban, there will be some new rules that for example, low income people would not be served by these retail suppliers. So that's going to protect the most vulnerable in the state. So we like that. There'll also be prohibitions on jacking the rate up without the consent or knowledge of the consumer. So if you sign up today and it's 16 cents a kilowatt hour, then they can't change it to 19 cents a kilowatt hour. When you're not looking, they would have to get your consent to do that. So those are huge consumer protections. Absolutely. Absolutely. And they will have to be other things that allow the department of public utilities to have a little bit more ability to police than they have now. So the Senate voted on July 1st, essentially almost the same language. So both the House and the Senate have passed major environmental energy legislation, like 100 pages each. And the process goes like this. Now that they've each passed it, the Senate on July 1 now, they will form what's called a conference committee. And there'll be three members from the House, three members from the Senate. And they will work together over weeks and probably months to work out the details of their 100 page bills. And there's a lot they'll argue about. We know that there are differences. That's what they do. That's what they do. But we're just glad on this one issue that you have me here today for, the House and the Senate are pretty well aligned. And I think there's pressure on them. And the more information that gets out, it's more likely that this will be one of the first things that they say, okay, check. Let's go on and argue about something else. So we're glad. We think that by October, the bill will be passed. And before the election, they'll try to get it done before the election. And that what we'll see is that cities and towns can ban or the other protections for low income people and otherwise will be in place. I'm going to jump ahead to the slide that really focuses on Western Mass. There's a whole color chart here, but the data on the left, percent of low income electric consumers enrolled in competitive supply, you can see the lighter the color, the less the risk. There's some dark colors here in Western Mass. I'm quickly looking at that looks like Southwick, Springfield, and I think East Hampton. Yes, exactly. And then some of the smaller communities up along Franklin County and Route 2 corridor. But right here in the lower Pioneer Valley, we have three that are in the dark color. It looks like Granville's in the red. We've got a couple of oranges, but... Yeah. And so the darker the color, the more likely it is that a low income person would be making the choice that we'd like to avoid, which is to be with one of these electricity suppliers. So yeah. And when you think of it, when say Springfield in a large city with a high percentage of low income people, and of those low income people, they have a propensity to choose these electricity suppliers. That's who we're trying to help. And we're talking about thousands of people in each community, and it's over 400,000 statewide. And so the message here for this part of Massachusetts is you've got options of municipal aggregation and the utility. We've only got about a minute or so left. I want to shift gears very slightly to talk about the Green Energy Consumer Alliance. Who are you? What do you do? We are a private nonprofit that's been around for 44 years. And our mission is to make a transition to clean energy that leaves no one behind. We want to see us reduce our dependence on fossil fuels, go to clean energy. And we are very concerned that we have social justice right at the top. This is an issue that we've been working on for years. And we have an office in Cambridge and we have an office in Providence, Rhode Island. We serve Rhode Island too, but we serve the entire state. And we've been around and we'll be around for a long time. So I just threw up your website, greenenergyconsumers.org. What can folks find there? There's data. We have lots of programs that consumers can tap into. The data we just went through today, is that up on the website? Yes. We have a page on it called, it's in a page called aggregation, municipal aggregation. And we advocate for consumers. We go to our blog. You can see what we're trying to convey to the world, convey to the legislature. We can learn about what we're saying about these energy bills I just talked about. So there's all kinds of stuff there. And then you can email us if you have questions. I'm Larry at greenenergyconsumers.org. We've got a great staff of about 20 people. Fantastic. Larry, I can't thank you enough for educating me and everybody who watches the show on predatory electric suppliers, you and your group are doing great work to bring this to the forefront. Like I said, I had no idea it was an issue until I read the article about it. Thanks for coming, making the drive out here and talking to me. It's a beautiful day. What a great part of the state. Absolutely. Thanks Larry. Take care.