This Moment in Chicanery: Electricity Marketplace Bait and Switch

Saturday, April 24, 2021

I learned two things from a recent (April 9) letter to my wife and me from a fund administrator for the Commonwealth of Massachusetts:  I don't know the first thing about buying electricity, and our attorney general looks out for dopes like me.

"Thank you for being a valued customer of Starion Energy," the letter said.  "On August 18, 2020, Starion Energy entered into a final judgment by consent with the Massachusetts Office of the Attorney General (the 'AGO').  The final judgment resolves the AGO's claims that Starion Energy, Inc. ('Starion') did not comply with certain provisions of the Massachusetts Consumer Protection laws in the course of marketing and selling Starion's electricity supply.  Although Starion denied the claims by the AGO, Starion has nevertheless agreed to establish a fund for the benefit of certain of its current and former customers."

The letter further said, "The Independent Administrator who administers the Fund has determined that you are eligible to receive reimbursement for a portion of what you have paid to Starion Energy for electricity supply services and/or fees.  Accordingly, enclosed is a check in the amount that the Administrator has determined is appropriate."

That check was for $263.33.  

We cashed it right away.  

Then I proceeded to find out why they sent us the dough. 

Online, I found a copy of a March 5 press release from AG Maura Healey's office announcing that customers of Starion were beginning to receive restitution payments as part of a settlement of allegations that it had used "unfair and deceptive sales tactics to lure more than 100,000 Massachusetts customers into expensive contracts with high electricity rates." 

These customers were collectively charged "millions more on their bills than they would have paid if they stayed with their utility company," the release said.

Healey was quoted thusly, "This company falsely promised thousands of Massachusetts customers big savings on their electricity bills, but instead overcharged them...We're glad to be returning more than $7 million to customers harmed by Starion's deceptive tactics."

The release cited a 2018 lawsuit accusing Starion, a company headquartered in Middlebury, CT, of violating Massachusetts consumer protection laws "by engaging in unfair sales tactics, including unsolicited telemarketing calls and pre-recorded robocalls that falsely promised customers lower electricity rates."

I asked my wife, "Do you remember our switching to this company?"

"Vaguely," she said. "A few years ago, I think it was, I spoke with a salesperson a couple of times who was saying how much money we could save on electricity."

"We must have talked it over then, but I can't remember that talk," I said.

She said, "You said something like, 'If we can save a few bucks, why not?' "

I said, "Do you remember what happened to our bills after switching?"

"The best I can recall, they went down for three or four months, then started going up," she said. "Before long, they were as high, if not higher, than before. I just figured, there's no beating the system."

"By the way," she added, "did you ever give electricity bills another thought?"

"Not once," I had to admit.

"How surprising," she said.

On the day we were having this conversation, there happened to be a letter in the pile of mail on our kitchen table from a different energy supplier offering to sell us electricity for three years at a guaranteed price of 10.99 cents per kilowatt hour.  

In a stab at being serious about our personal finances, I emailed a friend who knows a lot about electricity prices on account of his job.

"Is 10.99 cents a KW hour for three years a good deal, a smart move?" I wrote.

"I'm not a big fan of competitive supply options," he wrote back, "because the onus is on you to have to remember, and pursue, when your contract is up.  By contrast, your local municipal aggregator of electricity purchasers offers the same basic idea as a competitive supplier, without the mailings -- and with the bargaining power of more load-users, taking the need to do all the research off your shoulders.  As a result, what your aggregator is offering may not be the 'best' deal on the market at any particular time, but it usually involves less stress."

Yesterday, taking my friend's lead, I visited the website of the City of Melrose and filled out a form to enroll us as subscribers in the "Local Green" default (or standard) product offered by Melrose Community Power.  At the moment I enrolled, this product was priced at 10.521 cents per kilowatt hour.  

There was a feel-good aspect to the decision: at least 5% of the power we'll consume this way will always come from renewable sources.


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