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State Regulator's Staff Proposes That ALL Enrollments With a Retail Supplier Must Occur Through State-Run Energy Shopping Site!
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Massachusetts' retail energy market needs a "reset", Staff of the Massachusetts DPU said in a presentation filed in advance of a workgroup meeting which will kick off a revised review of the retail energy market by the DPU
See background on Massachusetts' revived retail energy review proceeding here
The DPU's retail market review proceeding (19-07) was opened to address the residential market, though an original Notice of Investigation specifically asked whether the previous proposals under consideration should also apply to the small C&I market
Staff's proposals discussed below generally do not explicitly state that they are limited to residential service, apart from the primary focus of the review proceeding being the residential market
Staff's presentation recounted prior attempts by the DPU to address concerns with retail supplier marketing and pricing, with Staff concluding that, "these initiatives 'nibble around the edges' of the market's
problems, when what it needed is a market reset."
Staff proposes that "all" initial enrollments with a retail supplier must occur through the Energy Switch MA shopping website/rate board (as noted below, Staff would also require all renewals to be done via Energy Switch MA as well)
"Energy Switch would act as the supermarket where
customers shop for electric supply products, comparing
price, term, content, fees," Staff envisioned
While retail suppliers could continue to engage in some marketing (as noted below, Staff would ban telemarketing and door to door marketing), Staff said that, to enroll a customer, the supplier must point the customer to Energy Switch MA to execute the enrollment, with the supplier's "role" limited to the following:
• point the customer to Energy Switch MA,
• tell the customer to enter the required information to
view products, and
• discuss why the prospective supplier's product is better for the customer than
the other products listed
Although not explicit, Staff states that suppliers would be limited to the above-enumerated actions with respect to customer enrollment. As such, it appears that suppliers would not be permitted to walk customers through an enrollment on Energy Switch MA, similar to the prohibition on suppliers being present for TPVs (while Staff favors ending telemarketing and door to door marketing, a mechanism that allows a supplier to walk a customer through enrollment on Energy Switch MA, that does not constitute telemarketing or door to door marketing, could be envisioned absent a prohibition or limitation to the contrary [such as a walk-through at an in-store tabletop])
Staff said that "telemarketing" [sic] and door-to-door marketing should be banned. (ECM notes the use of the term telemarketing and not telesales, and it is unclear whether other forms of telephonic interaction with a prospective customer, other than telemarketing, would be permitted, taking into account Staff's proposal that all enrollments shall occur through Energy Switch MA)
Staff said that, "nothing good can come out of
telemarketing or D2D [door-to-door] marketing".
Furthermore, to address high prices paid by customers due to auto-renewals, Staff would ban auto-renewals
All renewals would have to occur through Energy Switch MA, Staff proposes
Customers not taking any action at the end of a contract term would be dropped to default service
As an alternative, Staff suggested that a price cap be applied to auto-renewals
Staff envisioned such a rate cap being based on a "market-based formula", but Staff noted the administrative burdens of developing and maintaining such. The rate cap is not Staff's preference, with Staff favoring the outright auto-renewal ban
Additionally, Staff would require that any variable price customer, in order to continue service with their supplier, must re-enroll each month through Energy Switch MA
A variable price customer failing to re-enroll at the end of a month would be dropped to default service
The requirement for a customer to actively re-enroll onto a variable rate would serve as a means to ensure that variable rate customers are those "sufficiently knowledgeable" about the market and the "nuances" of variable pricing, Staff said
Discussing the need for the market reset, Staff cited two "overarching
problems" with the current retail market:
1. "Misleading/deceptive sales practices targeting vulnerable
customers", and
2. "High prices"
Staff asked: "Why, decades after the introduction of a
competitive supply market, are so many electricity
customers in Massachusetts vulnerable to these
practices?"
Staff answered that: "Because, even after ten years of efforts to
provide transparency to customers regarding competitive
supply (i.e., providing useful, understandable information
that is readily available), customers remain (i) under-educated about their electric service, (ii) under-informed
about their supply options; and (iii) generally under-interested."
Staff believes that prior actions taken by the DPU to rein in suppliers have failed to sufficiently address these two overarching
problems, with Staff also stating that potential additional actions that fall short of the "reset" outlined above would also similarly fail
Concerning voluntary renewable energy offerings, Staff would require that, for a product to be labeled as a renewable energy product on Energy Switch MA, the voluntary green energy under the plan must be
entirely composed of RPS Class 1 RECs
Staff noted that the Energy Switch site would need to be revised in order to accept enrollments in the manner envisioned. Staff also asked whether a mechanism can be developed to reliably validate that an enrollment
was "initiated" through Energy Switch MA
Staff said, "We expect no support from unscrupulous suppliers. In contrast, we hope that scrupulous suppliers will see the
benefit of 'competing on an even playing field' and
eliminating the uncertainty regarding the market’s future."
19-07
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Staff Would Require That Variable Price Customers Must Affirmatively Re-enroll Every Month
Regulator's Staff Says Retail Market Needs "Reset"
Staff Would Ban Telesales, Door-to-Door Marketing
February 25, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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