Retail Energy Concierge Service Says Regulator Should Prohibit Retail Supplier Prices In Excess Of Default Service Rate

March 5, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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Arcadia, Inc., whose various services include a retail energy concierge (broker) service, said in comments to the Massachusetts DPU that, "the best path forward for Massachusetts consumers and the Department would be to prohibit competitive suppliers from offering supply rates above the SOS rate."

Arcadia said, in comments filed in the DPU's investigation of the retail market (Docket 19-07) that, "Before responding to specific elements of the Tier One proposals, we wish to make a foundational comment. Our understanding is that this investigation is primarily the result of studies showing that sizable numbers of residential customers on competitive supply have paid more than the SOS rate. While there may be marketing issues the Department would like to evaluate even if all customers were saving money, we believe that the bulk of this investigation would be moot if rules were in place requiring competitive supply rates to be below the SOS rate. In such a market suppliers and their representatives could not unfairly take advantage of customers by charging an excessive rate. Customers would not be at risk of being charged a higher rate for switching away from the SOS. Such a market would also require less onerous oversight by the Department. It is the view of Arcadia that the best path forward for Massachusetts consumers and the Department would be to prohibit competitive suppliers from offering supply rates above the SOS rate."

In addressing specific rule proposals, Arcadia said, "Arcadia opposes the Department staff's proposal requiring all direct mail marketing material be subject to prior approval by the committee. Direct mail is a form of passive marketing and does not pressure potential customers to enroll. Rather, customers have time to conduct their own research and make their own informed decisions on their personal schedule. Until passive marketing, and specifically direct mail, is determined to be problematic, it should not have such a regulatory requirement. The department should remove this section from the final order."

Arcadia further said, "Arcadia opposes the Department staff's proposal to require competitive suppliers to report periodically on the total number of residential customers enrolled through passive marketing techniques, such as direct mail and online advertising ... [D]irect mail and online advertising are inherently different and less intrusive than door-to-door marketing and telemarketing and should therefore not require prior approval of marketing material before use."

"Should the Department still choose to require data on residential customers and low-income customers enrolled through passive marketing techniques, including direct mail and online advertising, we suggest the Department require competitive suppliers to provide the number of residential customers and the number of customers in the R2 rate class that are receiving electricity at a rate below the SOS rate. This will allow the Department to more effectively monitor the market and protect customers from inappropriate marketing practices and excessively complicated billing schemes," Arcadia said

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