Call 12 for Action

Switching to a competitive power supplier could cost you, data shows

PAWTUCKET, R.I. (WPRI) -- Aleisha Ross was hoping for a cheaper electric bill, so she ditched National Grid and signed a contract with an energy company.

"The first bill that I had was OK," Ross recalled. "But as the months went by, it just started getting higher and higher and higher."

She's not alone.

According to data from the R.I. Division of Public Utilities and Carriers, competitive suppliers cost residential customers in Rhode Island about $28 million more than National Grid's standard offer rate over the past five years.

Lt. Governor Dan McKee, who's been a staunch supporter of competitive electric suppliers, said the problem stems from companies that use high-pressure sales tactics, including door-to-door sales and telemarketing. 

"It's wrong. It's totally wrong. We need to be protecting the consumer," McKee said. "Competition is supposed to be driving the savings, and that's why we opened up the Empower RI website." 

Mckee said if customers shop through Empower RI and pay attention to their contract terms, they can save big.

"All the vendors there are vetted," McKee explained. "It's safe, it's simple, and you know whether you're going to save money or not."

McKee says there's also a legislative solution. 

"We need to say if you’re going to be a competitive supplier in Rhode Island and you have a three-month or six-month contract, when that contract ends, unless the customer tells you that they want to continue the service with you, then it automatically goes back to the standard offer," McKee suggested. "If that was built into the state of Rhode Island, a great deal of this predatory-type nonsense that’s going on and really hurting consumers would end." 

But McKee's democratic primary challenger in the lt. governor's race, Aaron Regunberg, says he has concerns about the entire competitive supply industry. 

"These companies are out to make money and they do that by targeting vulnerable people," Regunberg said.

Regunberg cites Massachusetts Attorney General Maura Healey, who called for a shutdown of the residential competitive supply industry following a two-year study by her office, which revealed competitive supply customers in Massachusetts paid $176.8 million more than they would have on the standard offer rate. 

"In Massachusetts, they're looking to ban this industry, and that makes it even more mind-boggling that in our state, Dan McKee has been using taxpayer dollars to help and promote these companies," Regunberg added.

Ross tried repeatedly to cancel her contract, but continued to receive bills. 

That was a few years ago. There's still an outstanding bill lingering, but Ross says she refuses to pay it. 

Recently, the Division of Public Utilities and Carriers implemented a new set of rules to better protect customers, which include: 

  • A requirement that Nonregulated Power Producers (NPP’s) provide consumers with specific contract terms
  • Holding NPP’s accountable for actions of their third-party agents
  • Prohibiting abusive switching practices
  • Limiting residential early termination fees to $50
  • Requiring electric bills to include the Standard Offer Service (the electric supply rate offered by the electric company) price to compare

The Division of Public Utilities and Carriers is able to issue penalties for violations.

Frank Caliva, a spokesperson for the American Coalition of Competitive Energy Suppliers, said the ACCES does not take positions on specific state policies, but said "a well-educated consumer is a well-protected consumer."

"Just a few month ago, in April 2018, the new Nonregulated Power Producer Consumer Bill of Rights took effect in Rhode Island," Caliva added. "We believe ensuring that consumers understand both their rights and the obligations of suppliers under these rules is vital to a flourishing competitive marketplace."

Susan Campbell (scampbell@wpri.com) is the Call 12 for Action and Target 12 consumer investigator for WPRI 12 and Fox Providence. Follow her on Twitter and on Facebook.


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