Consumer's Guide to Contracting for Competitive Supply

What to do when someone calls offering to sell you electricity or natural gas:

1. Ask who they represent. Some brokers or consultants will look for the best deal among many suppliers, which can be useful. Some are really only representing a single supplier, but will not tell you this. Sometimes a broker won't tell you about a particular supplier, if it is a supplier who won't pay them a fee. Ask what company your contract would be with. Check with multiple brokers, suppliers, or consumers to find out if there are options you are not being offered – this can be a sign that you are being steered away from or toward a particular supplier. What is the difference between a broker, a consultant, and a supplier?

2. Ask for a copy of the contract and read it before you sign! Some brokers will try to push you to sign up right away, without reading the contract – this is a warning sign. Ask for a contract to review. Remember: they write the contracts, not you – you need to understand what you're signing up for. Do not give out your account numbers before you've read the contract – customers in Massachusetts have been "slammed" (switched to another supplier without their consent). If the broker asks to see a bill to give you a quote, white-out the account numbers. What to look for in a contract.

3. Compare prices. Energy markets are very volatile, and prices go up and down every day. Just like buying stocks, you don't want to buy on a day when the price is high, even if it's a long-term contract. Suppliers will provide you with quotes any time you ask, but you want to make sure that you are comparing prices from the same day among suppliers, and that you're not buying when the overall market is up. How to figure out when to lock in a price and how to compare offers from different suppliers.

4. Ask what their fee is. Some brokers or consultants will charge you a flat fee up front. Others will build their fee into the price you pay. If the broker tells you "you don't pay any fee", it usually means that their fee is built into your price from the supplier and the supplier pays the broker directly. This is common practice, and can be a useful option for some customers, but you can still ask them how much they are paid, so you can compare to other brokers. Some brokers or consultants will charge you a fixed fee and also get paid by a supplier. When they tell you how they get paid, get them to put it in writing, make sure you understand it, and use it to comparison shop and negotiate.

5. Ask for references and check out what they tell you. Don't skip this step! Make sure the firm is licensed in Massachusetts. Ask who you will be getting the bill from and who you would be contacting for customer service after you sign – some brokers bow out of the relationship after you sign. Ask for references from organizations similar to yours. Call the references and ask them how long they've been with this supplier and if they get their bills on time and if they're correct. Ask PowerOptions staff to see what other PowerOptions members have to say about the firm.

6. After you sign. When you get your first bill, make sure you are being charged the correct amount. If you don't understand your bill, call your customer rep and ask them to explain it. Make sure you are not being charged taxes if you are tax-exempt. Although most electric suppliers offer billing that is combined with your local utility company bill, we recommend separate billing – although this means you have more bills to pay, it minimizes confusion if there is a billing mistake by either company. Massachusetts law offers protections for energy consumers: if you have a complaint about your supplier, contact the Consumer Division of the Massachusetts DPU: www.mass.gov/dpu.

PowerOptions is here to help! We are a non-profit consortium created to give our members disinterested assistance navigating energy markets. Call us and we can answer your questions!

Frequently Asked Questions

If you have a question about contracting for electricity or natural gas, write to us at: info@poweroptions.org or call: 617/737-8480

Stories and tips from PowerOptions members

Tell us your "Buyer Beware" stories! Send us email and we will post them here.

Disclaimer
Every effort has been made to present accurate information, but the Massachusetts Health and Educational Facilities Authority and its subsidiaries do not warrant or represent that this information is free of errors.

Do not act or rely upon any of the information on this site without seeking professional legal advice. Nothing provided herein should be used as a substitute for the advice of competent counsel.