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State Regulator Urges Passage Of Bill That Would Require $5 Million Bond From Retail Suppliers, Ban Commission Payments, & Require That All Enrollments Occur Through State Website

The Massachusetts DPU has suspended the working groups under its retail energy market reset proceeding, as the DPU said that, “Absent legislative reform, the Commonwealth’s residents will remain exposed to teaser rates, deceptive and high-pressure sales tactics, and vague and excessive greenwashing claims.”

The DPU said that, “The Legislature is best positioned to deliver such reforms, including by adopting Governor Healey’s proposals in H.4144.”

“The Commission urges the Legislature to take swift action to adopt the necessary reforms,” the DPU said

The suspension of the Docket 19-07 workgroup process includes the suspension of the upcoming deadline of Wednesday, August 6, 2025 for comments responsive to the DPU Staff’s latest previously reported market reset proposal

The DPU directed Department Staff to, “continue using all available regulatory tools to enforce existing consumer protections in the residential competitive supply market.”

Among other things, H.4144 would require each energy marketer, retail supplier, or other supplier to provide a bond of $5 million for each retail license

The bill provides that, “The bond shall be conditioned upon the full and faithful performance of all duties and obligations of the applicant as a retail supplier and shall be valid for a period of not less than 1 year.”

Under the bill,  ”energy marketer” means, “any person, firm, partnership, association, private corporation, or other third-party who contracts with or is otherwise directly engaged and compensated by a supplier to sell electric generation services, or contracts with and is directly compensated by a third-party marketer of the supplier to sell electric generation services on behalf of a supplier, that markets, advertises, or otherwise offers to sell generation service to retail customers that is acting as an agent for a supplier, including, but not limited to, individuals or entities engaged in door-to-door, telemarketing, or tabletop interactions with retail customers.”

The bill would prohibit a retail supplier from paying a commission, or other incentive-based compensation for enrolling customers, to any energy brokers, energy marketers, other third-party marketing agents, or any other employees or agents

H.4144 would provide that, “A generation company or supplier may not … automatically renew a residential customer’s contract at the end of a contract term without the written consent of the residential customer.”

H.4144 would require that all enrollments be processed through a state-run website

Specifically, the bill provides, “The department shall establish and maintain a public website for residential customers to compare available retail electricity supply products. Suppliers must list all products available to residential customers on said website and all customer enrollments must be processed via the website or through a related platform established by the department.”

H.4144 would allow supplier-specific POR discount rates

While a standard POR rate would still be established, the bill provides that, “the department may establish different percentage discounts for suppliers based on the supplier’s amount of uncollectible bills or percentage of customers in arrears relative to the average of the uncollectible bills for the participating classes of the electric distribution company or the average number of customers in arrears.”

Retail supplier rates to customers on low-income utility rates shall not exceed the trailing 12-month average of a distribution company’s default service rate as of the date of the agreement with the customer.

H.4144 would provide that retail suppliers may not:

• offer a variable rate, other than a rate that adjusts for seasonal variation more than twice in a single year or a time-of-use rate that establishes different rates for periods within a single day

• impose on a customer a fee for cancellation or early termination of an electricity supply agreement

• offer a voluntary renewable or green energy product that contains clean or renewable energy attributes other than those that qualify under any clean energy standard regulation established by the department of environmental protection pursuant to subsection 3(c) of chapter 21N of the General Laws

The bill provides, “Any energy marketer shall be a legal agent of the supplier. No energy marketer may sell electric generation services on behalf of a supplier unless such energy marketer has received appropriate training directly from such supplier. This subparagraph shall not apply to third-party brokers or consultants or agents acting on behalf of customers that are compensated by the customer as part of the customer’s electric contract price.”

The bill would require that retail suppliers shall report their specific charged rates to the DPU at various intervals, with a supplier-specific average of each individual supplier’s rates made public

H.4144 would allow the DPU to charge up to $10,000 for licenses, with the fee permitted to be differentiated between energy brokers, energy marketers, and suppliers.

The bill provides that no retail customer may be assigned or transferred to another supplier without prior approval by the DPU

The bill would also make various default service procurement changes

The bill allows EDCs to procure default service via, “competitive bidding or through such other process approved by the department, including procurements of varying lengths and in combination with other distribution companies[.]”

A statement from Gov. Maura Healey concerning the bill states, “The Act aims to reduce bill volatility by giving the DPU and electric utilities flexibility on the timing and duration of basic service electricity supply procurements.”

H.4144 provides that, “standard default service rates, excluding time-varying rates and monthly variable service rates, for residential customers shall be changed no less [sic] than once every six months.”

H.4144 also states, in a section concerning default service, “The department may require a separate mechanism for recovering certain charges, to be itemized separately on a customer bill, including, but not limited to, those in connection with the wholesale electric markets as administered by ISO New England, Inc. or federal tariffs on imports to such markets.”