Senate adds bills to reform electric industry

The Massachusetts State House in Boston

The Massachusetts State House in Boston

By SAM DRYSDALE

State House News Service

Published: 04-22-2024 4:21 PM

Senate Democrats plan this week to make a big push for reforms to the state’s motor vehicle “Lemon Law,” insurance coverage for home heating oil leaks and the controversial competitive electric supply industry.

The Senate on Monday formally added a trio of bills to its agenda for a session Thursday, including the latest attempt to prohibit third-party companies from selling electricity directly to individual residents.

Elected officials have spent years weighing whether to intervene and bar those electric suppliers from legally enrolling residential customers, arguing that the sector often leans on misleading or predatory tactics to lock people into pricey contracts.

Gov. Maura Healey pushed as attorney general for reforms, and her successor, Attorney General Andrea Campbell, has also made the issue a priority, but reforms have not made it through the Legislature where there’s a lobbying battle underway.

“A constituent of ours gets a phone call, gets a knock on the door, and is sold a bill of goods. Their expectations are that they will be saving money, and in the end, it ends up costing them a great deal of money,” Sen. Brendan Crighton, one of the bill’s sponsors, said in an interview Monday. “Sometimes, the practices have been so deceptive that folks don’t even know that they are enrolled with a competitive supplier until they get a whopping bill.”

The bill (S 2738) would prohibit competitive electric suppliers from signing up new residential customers, effectively limiting them only to larger commercial clients.

Senators endorsed similar reforms in each of the past two sessions as part of omnibus climate and energy bills, but neither provision survived negotiations with the House.

This time, Senate Democrats will take the proposal up as a standalone bill. That will put more pressure on House Democrats, especially given Healey’s support, to take a definitive up-or-down stance without entangling the measure with other policies.

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A 1997 deregulation law allowed Bay Staters to get electricity from a competitive supplier instead of directly from a utility company.

Industry leaders and their supporters contend that they offer lower prices and more consumer choice, particularly when utility prices spike.

Campbell’s office published a report earlier this month finding that competitive electric supply produced $30.4 million in net savings for its residential customers between July 2022 and June 2023 compared to what they would have paid on basic utility service. But the same report said last year was the first since at least 2015 with a net savings instead of a net higher cost, and that the eight-year total reflects about $577.6 million in additional costs borne by residential competitive supply customers.

“The results of the experiment allowing this industry to exist has not met any goals of helping consumers save money, but rather has hurt very vulnerable populations,” Crighton, a Lynn Democrat, said.

One industry representative, Retail Energy Advancement League CEO Christopher Ercoli, argued that the report from the attorney general’s office “misleads both the public and the state legislature” by comparing basic utility offerings to the “value-added products” that some competitive suppliers provide.

The bill would only prevent companies from enrolling new residential customers. They would still be allowed to add business clients and sell energy to municipal aggregation programs that Crighton said are better equipped to navigate the terrain.

“They have the resources, they have the legal expertise and infrastructure in place to negotiate fair deals that are going to end up benefiting their constituents,” he said. “It’s much different when you have that infrastructure in place instead of an individual being told you’re going to save a ton of money only to realize the opposite is true.”

The two other bills on the Senate’s agenda for Thursday also fall under the umbrella of consumer protection.

One measure (S 2737) requires insurers to cover residential property damage caused by a leak in a home’s liquid fuel tank or home fuel supply lines. Existing law allows companies to make insurance available for oil leaks, but Senate President Karen Spilka’s office said many homeowners are not aware of the option and therefore have no coverage when they may need it.

Senators approved a similar bill in April 2022, but it didn’t surface for a House vote before the 2021-2022 term ended.

Senate Democrats also plan to bring forward legislation (S 2736) adding more protections for people who purchase used and leased cars in Massachusetts.

The bill would update the so-called Lemon Law by giving consumers seven days from the date of a vehicle’s delivery to get a full refund if it fails inspection, instead of seven days from the date of sale under existing law.

It would additionally increase the surety bond required for businesses to buy or sell used vehicles, allow the attorney general to make a claim against a surety bond for losses suffered related to the purchase of a used car, increase the mileage for used vehicle warranties, and extend repossession notices and rights to holders of leased vehicles.

Spilka’s office said the vote Thursday will be the first time the Senate takes action on the automobile protection measure. Like the competitive supply bill, it previously won the support of the governor: when Healey was attorney general, she co-sponsored an earlier iteration of the measure alongside Sen. Paul Feeney of Foxborough.