Don't pay too much for Massachusetts electricity

Recent allegations that a Massachusetts retail energy provider engaged in deceptive marketing and sales practices to lure customers into costly contracts – subsequently leading Attorney General Maura Healey to call for an end to energy choice in the state – underscore how important it is for customers to know exactly what they’re agreeing to when signing up for an energy plan.

Nobody wants to be cheated when it comes to their electric bill: That’s why Choose Energy only works with trusted providers that offer plans that benefit customers, both in regards to service and price. Over the past two years, residential electric and natural gas customers in Massachusetts could have saved an average of 24 and 10 percent on their monthly bills by shopping for a 12-month plan through Choose Energy, compared with those who purchased energy from National Grid and Eversource, respectively.

But it’s also important for customers to be empowered when choosing the right plan for them; that’s why we take the time to walk our customers through what is available to find the right fit for their lifestyle and budget.

In general, here are a few of the things to look out for when selecting an energy plan – both to make sure you aren’t surprised when you receive your monthly bill and to make sure you aren’t locked into a contract that isn’t what you wanted:

This one seems obvious, but it’s something a lot of customers forget about after they’re signed up for their contract. REPs offer a variety of plans that last for six months, 12 months, 24 months or even longer. The lowest-priced plans typically pair with shortest term lengths. This is a good choice for some customers – as long as they’re willing to shop around again when the six-month term expires. If a customer doesn’t, the provider will likely re-enroll the customer at its default rate, which will likely be higher than the rate in the six-month contract.

Re-enrollment into a default rate isn’t a trick or a deceptive practice: The provider will send notice when a plan is about to end, but it does require extra work on the customer’s part to ensure he or she is getting the lowest possible rate.

Energy prices are expected to rise over time as well – so locking in today’s rate for six months may be more expensive over time than signing up for a longer-term plan at a slightly higher rate now.

What does it mean for you? If you don’t have the time to shop around for a plan that frequently (or think you’ll forget), or if you want to avoid future spikes in energy rates, a 24- or 36-month plan is probably the better option for you.

Your utility sells power at a variable rate. Prices are tied to the market, which can be affected by any number of factors. That’s why suppliers also offer fixed-rate plans – ranging from six months to three years or even longer.

Put simply, variable-rate plans change with the market, even within the confines of your contract, so you potentially can be subject to different rates every month. While it’s possible you can see lower rates with variable-rate plans, you can also see those rates skyrocket when the market dictates it. Fixed-rate plans lock in a stable rate for the length of the contract, meaning that even when energy prices rise, your rate stays the same.

This actually can be a sign of an REP that isn’t looking out for your best interests – plans that are far below the rest in terms of price. It is true that shopping around for your energy plan can offer you savings compared with your utility, but the prices providers offer should reflect current energy rates. In other words, if current energy rates are 12 cents per kWh, and every other REP is offering a plan close to that rate, it’s nearly impossible for an REP to offer a plan that’s 4 cents per KWH. The company would lose too much money.

When you see plans with these “too good to be true” prices, it’s especially important that you read the fine print because the REP could be trying to deceive you. Your rate could be based on a defined amount of usage; in certain cases, it’s based on a nearly impossible amount of usage. So, if you don’t use enough energy or use too much, the REP charges you another rate – a much higher one. And when you call to complain, the especially unscrupulous providers will point back to your contract, the one in which you “agreed” to be charged that much.

Customers in deregulated states are bombarded with options, some of which could be costlier than purchasing energy from their local utility. It can be overwhelming enough as it is to shop for an energy plan – without having to worry that a company is trying to take advantage of you.

That’s why Choose Energy believes in the power of educating our customers, so they know what they’re signing up for. Choose Energy is one of the only places where you can get true comparisons on what you’ll pay versus the utility rate. Savvy shoppers have the opportunity to save in deregulated states – and we’re here to help.