A coalition of municipal leaders and consumer advocates have again called for Massachusetts lawmakers to ban third-party retail energy suppliers.
Critics say the industry uses predatory sales tactics and deceptive contracts that disproportionately harm low-income residents, especially those in Gateway Cities.
A 1997 law gave Massachusetts consumers the option to buy their electricity directly from a competitive supplier instead of a major utility, like National Grid, Eversource or Unitil.
Attorney General Andrea Campbell office’s most recent competitive electric supply report, released on March 31, revealed that over the last decade, Massachusetts residential customers who switched to competitive supply retailers collectively paid over $738.7 million more on their electric bills than they would have had they stayed on basic service.
The report confirms the long-standing trend of competitive electric suppliers charging low-income customers higher rates than other customers. From July 2024 to June 2025, individual low-income consumers lost an average of $286 annually to the competitive electric supply market, compared to $181 lost by higher-income consumers.
Overall, during this period, residential customers collectively experienced a net loss of $87.4 million.
Consumer advocates have lobbied for an outright statewide ban on third-party electricity suppliers, citing extensive overbilling. Recently, a coalition of a dozen mayors urged lawmakers to address aggressive door-to-door and telemarketing practices.
The Retail Energy Supply Association (RESA), an industry advocate group, contends that outright bans create utility monopolies and deprive consumers of the right to choose renewable or specialized pricing plans.
They advocate for stronger enforcement of unscrupulous operators, rather than eliminating the entire market.
Current state legislative efforts, including a major clean energy bill supported by the attorney general, would prohibit these retail-energy suppliers from enrolling new residential customers.
Energy-affordability legislation that recently cleared the House includes a municipal opt-out provision that would let cities and towns ban predatory suppliers from signing or renewing residential contracts.
Paired with new limits on automatic renewals, variable-rate contracts, and aggressive door-to-door sales tactics, the bill would give communities the enforcement tools they seek.
Efforts to rein in these retail suppliers have gone on for years.
Back in 2021, then Attorney General Maura Healey called for the dismantling of the competitive residential electricity market.
Healey’s office said electricity customers in Massachusetts who switched to a supposedly competitive supplier paid $426 million more from July 2015 to June 2020 than they would have had they stayed with their utility company.
Healey confirmed that many consumers who switched to competitive suppliers were charged much higher rates, collectively paying nearly $180 million more over the prior two years.
These results reflected similar inflated charges found in earlier reviews.
The report also indicated that low-income households — including those in the Gateway Cities of Brockton, Fall River, Lawrence, Lowell, Lynn and Worcester — comprised a disproportionately large share of the roughly 450,000 customers in the state’s individual competitive supply market, leaving them susceptible to paying those unnecessarily high prices.
Two years later, AG Campbell’s probe into retail energy suppliers reached similar conclusions.
However, lumping reputable energy suppliers with the unscrupulous ones has given many lawmakers pause about eliminating an entire industry.
While many individual companies may prey on uninformed, low-income populations, many other suppliers — including “green” alternatives — specifically spell out the cost of acquiring electricity, usually at a higher price than other options.
We’ve previously supported legislation that pulls the plug on problematic electricity suppliers, a position that would likely gain the support of both the House and Senate.
And the bills currently working their way through the Legislature would eventually eliminate the market for these retail energy suppliers, pre-empting the need for an outright ban.
In the meantime, consumers wanting to evaluate their utility bills can utilize state resources or community choice programs — also known as municipal aggregation programs — to ensure you’re not overpaying.
In Massachusetts, you can check if your municipality participates in a vetted community choice electricity program.
There are distinct differences between standard utility rates and third-party retail pricing.
Your utility bill is split into delivery — paying the utility to maintain wires/poles — and supply — the actual energy used.
With standard utility rates — the most common consumer option — utilities don’t profit on the supply portion of your bill; they pass the market cost directly to you. Also, state regulators — the Department of Public Utilities — must approve rate adjustments before they can take effect.
Rates generally adjust on set schedules, usually every six months – May 1 and Nov. 1.
Conversely, you must voluntarily sign up for a third-party contract, often initiated by door-to-door sales, mailers or Internet promotions.
Rates might start with a low “introductory offer,” but can transition into high variable rates.
Providers often pitch perks like 100% renewable energy offsets, gift cards, or predictable flat-monthly billing, while many contracts automatically revert to expensive month-to-month plans if not cancelled.
If you see your local utility’s name on your monthly statement — like Eversource, National Grid, or Unitil — you’re being billed the standard rate.
As in every other commercial transaction, it pays to be an educated consumer.
Especially with energy consumption, since we already pay some of the highest rates in the country.