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The Alternative Utility Supply Market—A Scam for Most, if not all, Consumers - Information for your clients

The following information is from GBLS atty Alexa Rosenbloom. We are sharing this important info with you to help you give the low-income families and individuals you work with a heads up.  See also 4/13/19 Boston Globe Yvonne Abraham column which underscores this scam!

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If any energy company representative calls your client, shows up at their door, or approaches them in a store parking lot offering to save them money on gas and electric bills, strongly urge your client to turn them away.  

In 1997 the state deregulated the electric utility market and allowed for a competitive supply.  The traditional utility companies—National Grid, Eversource, Unitil, still deliver the electricity and send out bills but the supplier can be another company (known as a competitive energy supply company or CES).  Examples of such companies are SFE Energy, Provider Power, and Xoom Energy, among many others. 

While competition sounds like a good thing, in reality it has not been.  As the AG’s office has found, Massachusetts consumers in the competitive supply market paid $176.8 million more than they would have paid if they had received electric supply from their electric company during the two-year period from July 2015 to June 2017.  Moreover, low-income customers make up a disproportionately large share of the competitive supply market and have lost even more from competitive supply than other consumers. 

Not only are low-income customers losing more from this industry, they are being targeted along with people of color and immigrants.  The CES companies are using aggressive and deceptive sales tactics to sign up these individuals, sometimes without their even knowing so.  For example, they are going door-to-door and pressuring vulnerable consumers into contracts based on misinformation and false promises of lower prices.  Worse, they are making it extremely (and expensive) for consumers to get out of their contracts.

Please make sure the individuals and families you work with are on the lookout for unscrupulous solicitors. 

If someone comes to an individual or family’s door asking to look at their utility bill, they are almost definitely from an alternative supplier rather than from a traditional utility company and your clients should be very wary.

Households that think they may already have been switched should look at their bill (it’ll have a spot where it lists a customer’s supplier) or contact their utility company to ask.  If you learn of any low income households who have been affected in any way by this industry (pressured to switch, have switched, etc.), you can take the following steps:

·         Refer the family or individual to Greater Boston Legal Services (GBLS), which  is currently open to taking cases in their service area.  Call GBLS’ main number: 617-371-1234

·         If outside of the GBLS main service area, have the family or individual contact your local Legal Services or call the Department of Public Utilities: DPU’s main number is (617) 305-3500

For more information (but not for direct client referral), contact Alexa at: ARosenbloom@gbls.org


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