Retail Supplier Abuses and High Prices for Consumers: Does Retail Choice Still Make Sense?

1. NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER ADVOCATES Retail Supplier Abuses and High Prices for Consumers: Does Retail Choice Still Make Sense? Susan Baldwin June 21, 2019

2. Topics • Introduction • Harm to all residential customers (purchasing individually) • Disproportionate harm to disadvantaged customers • Conclusion Views expressed are my own! Susan Baldwin | NASUCA Mid-Year Meeting

3. Estimates of participation and loss from residential studies Susan Baldwin | NASUCA Mid-Year Meeting

4. Case Study: Maryland • “Where Do We Go From Here?” report for Office of People’s Counsel • OPC has long history of advocating for consumer protection and initiating investigations of suppliers • Estimated net consumer loss (electric and gas) of $54.9 million/year based on… • OPC-compiled, supplier-reported electric and gas rates • PSC-reported participation rates • Highlights need for… • Data on prices actually paid by consumers • Understanding of impact on low-income customers and low-income communities • “Maryland’s Dysfunctional Residential Third-Party Energy Supply Market”(Abell Foundation) • 40 low-income account holders interviewed for the report paid, on average, 51 percent more for electricity and 78 percent more for natural gas (versus BGE Standard Offer Service rates) Susan Baldwin | NASUCA Mid-Year Meeting

5. Case studies: MA and CT (actual prices paid) Massachusetts, 2016 – 2017 • 2018 Report prepared for the Massachusetts Attorney General’s Office (See also “Competing to Overcharge Consumers” by NCLC) • The AGO’s analysis of data for July 2017 – June 2018 will be produced in a forthcoming supplemental report Connecticut, 2016 – 2018 • Analysis conducted on behalf of the Connecticut Office of Consumer Counsel Areas of focus: • Overall participation rates, and losses from participation • Differences in participation by consumer race and income Susan Baldwin | NASUCA Mid-Year Meeting

6. Frequency of varying levels of consumer loss: all incomes (MA) Susan Baldwin | NASUCA Mid-Year Meeting

7. Zip-level income andretailchoiceSelected MAcities,June 2017 Susan Baldwin | NASUCA Mid-Year Meeting

8. Participation: non-low-income Susan Baldwin | NASUCA Mid-Year Meeting

9. Participation: low-income Susan Baldwin | NASUCA Mid-Year Meeting

10. Participation rates by zip-level demographics (MA) Susan Baldwin | NASUCA Mid-Year Meeting

11. Retail choice harms disadvantaged customers (CT) Statewide • Hardship customers pay premium of $0.017 per kWh → $11.93 per month based on actual average usage • Non-hardship customers pay premium of $0.010 per kWh → $7.04 per month based on actual average usage • Hardship participation is 35% • Non-hardship participation is 27% Susan Baldwin | NASUCA Mid-Year Meeting

12. Retail choice harms communities of color (CT) • In ten neighborhoods (ZCTAs) with highest percent minority: • Percent minority ranges between 47% and 89% • Hardship participation: 26 – 48% • Average hardship premium: $0.017 – 0.026 per kWh • Average non-hardship premium: $0.011 – 0.020 per kWh • In ten neighborhoods with highest percent lacking English proficiency: • Percent lacking English proficiency ranges between 15% and 27% • Hardship participation: 28% – 50% • Average hardship premium: $0.017 – $0.022 per kWh • Average non-hardship premium: $0.010 – $0.020 per kWh Susan Baldwin | NASUCA Mid-Year Meeting

13. Hardship customers fare better in wealthy communities than in poor communities (CT) • Stark differences by neighborhood (ZCTA) median income • Poorest: Waterbury, median income $12,036 • Hardship participation rate of 50% • Non-hardship participation of 44% • Hardship premium is $0.021 per kWh • Non-hardship premium is $0.010 per kWh • Wealthiest: Wilton-Weston, median income $219,860 • Hardship participation rate of 32% • Non-hardship participation of 30% • Hardship premium is $0.002 per kWh • Non-hardship premium is $0.008 per kWh Susan Baldwin | NASUCA Mid-Year Meeting

14. Conclusion Susan M. Baldwin smbaldwinconsulting@gmail.com www.smbaldwinconsulting.com (617) 388-4068 Ms. Baldwin’s views today are based in part on her participation in the following projects: • Connecticut Public Utilities Regulatory Authority Docket No. 13-07-18, PURA Establishment of Rules for Electric Suppliers and EDCs Concerning Operations and Marketing in the Electric Retail Market, testimony and supplemental testimony (with Helen E. Golding) on behalf of the Connecticut Office of Consumer Counsel, March 10, 2014 and March 17, 2014 • “Are Consumers Benefiting from Competition? An Analysis of the Individual Residential Electric Supply Market in Massachusetts” (with Sarah M. Bosley), prepared for the Massachusetts Attorney General’s Office, March 29, 2018 • “Maryland’s Residential Electric and Gas Supply Markets: Where Do We Go from Here?” (with Sarah M. Bosley), prepared for the Maryland Office of People’s Counsel, November 2018. • Connecticut Public Utilities Regulatory Authority Docket No. 18-06-02, Review of Feasibility, Costs, and Benefits of Placing Certain Customers on Standard Service Pursuant to Conn. Gen. Stat. § 16-245o(m), testimony on behalf of Connecticut Office of Consumer Counsel, February 27, 2019 • “Residential energy supply market: Unmet promises and needed reforms” (co-authored with Frank A. Felder), The Electricity Journal, 32 (2019) 31–38 Susan Baldwin | NASUCA Mid-Year Meeting