Participation in the Boston Community Choice Electricity program, championed by Mayor Michelle Wu with a goal of reducing the city’s dependence on fossil fuels, is technically optional. But few ratepayers, including thousands of people poor enough to qualify for a discount on their electric bills, appear to be aware they have a choice. Data show that after they receive a mailer from the city, about 94 percent of BCCE’s customers are opted automatically into the middle level of a three-tiered pay structure, which provides a greener mix of power sources than the cheapest level.
Edgar Dworsky, of Somerville, who edits the website ConsumerWorld.org, called the “opt-out” design bad for consumers.
“Use of ‘negative option’ plans, where a customer is presented with an offer that will go into effect unless the customer affirmatively rejects it, are generally considered to be unfair or deceptive,” Dworsky said.
Boston’s is the largest of about 200 such programs in Massachusetts; it is not unusual in defaulting customers to a higher-priced option. And the disparities in Boston’s program are not as large as they are in some communities. In Newton and Somerville, for instance, the difference between the default option and the cheapest one is significantly larger than in Boston.
In Somerville, those who wind up in the middle tier pay an average of $175 more a year than those in the cheapest level. In Newton, the disparity is almost 20 percent, or $305 a year.
Those who land in Boston’s middle tier currently pay 4.2 percent more for power than those in the cheapest tier.
So far this year, customers in Boston are paying significantly more than they would if they opted out and instead paid the rate offered by the monopoly utility, Eversource. At current rates, a typical ratepayer would save $169 a year by switching from BCCE’s middle tier to Eversource.
That will change Aug. 1, however, when Eversource’s rates for the next six months go into effect. The new rates will be almost identical to BCCE’s middle tier, but slightly higher.
While the cheapest rates in the BCCE program have often been lower than those offered by Eversource, the middle-tier BCCE rates, which most Bostonians are steered into, are by design higher than those in the lowest tier.
The aim isn’t to punish ratepayers; it’s to gradually move the city away from fossil fuels and toward solar, wind, and other sustainable sources. Those in the middle tier help fund a power mix where nearly half comes from renewables, while those in the lower tier fund a power mix with less than a third from renewable energy — matching that of Eversource.
While the extra costs ratepayers bear for the greener power mix are arguably modest, they add to a heavy burden. As of April, Massachusetts utility customers paid more per kilowatt-hour than residents of any state save California, Connecticut, and Hawaii, according to the US Energy Information Administration. The average price for a kilowatt-hour of electricity in Massachusetts is 76 percent higher than the US average.
Those challenges may grow as Massachusetts officials push to get at least a half-million homes running on electricity-guzzling heat pumps instead of gas. Anxiety over prices has already prompted Governor Maura Healey to propose a suite of measures to help ratepayers save money.
For low-income Bostonians, the impacts are greater still. One in four Boston families spends nearly a quarter of their household income on energy, a recent study found.
And even those whose poverty is known to the government don’t get steered toward the cheapest electric plans.
About one in 10 Boston ratepayers have qualified for subsidized electric rates by providing proof of their low income. In Mattapan and Roxbury, nearly a quarter of consumers get this lower rate.
Yet when it comes to the power mix they receive, the vast majority of these people wind up in the city’s middle tier, costing them more. In Mattapan and Roxbury, for instance, barely 2 percent of customers are in the city’s lowest price tier. In other words, only about 1 of every 10 customers in these neighborhoods who have demonstrated they are poor enough to receive cheaper power rates are getting the city’s best rate.
Boston’s program was approved unanimously by the City Council in 2017, with Wu, then a city councilor, co-sponsoring it. The program launched in 2021.
Wu’s administration says the city has to balance multiple goals, including a move to renewable energy.
“It’s price stability. It’s savings, and it is also renewable energy,” said Oliver Sellers-Garcia, the city’s Green New Deal director. “The goal is not just to provide the lowest cost savings. The goal is to get the people of Boston the best thing which balances all those things.”
But the city’s data and interviews by the Globe suggest few Bostonians are aware they have options.
“I don’t remember being given choices,” said a senior from Hyde Park who did not want to be named.
The man, who receives the discount available to low-income residents, was routed into BCCE’s middle tier. He was able to quickly find his latest bill when asked by reporters, but he could not locate a letter from the city detailing his options.
Ewura Yankah, the director of constituent services in City Council District 7, which includes some of the city’s poorest neighborhoods, told the Globe the city could better communicate options.
“We agree that there’s an opportunity for increased outreach,” Yankah said.
One consumer advocate focused on renewable energy, Larry Chretien, said he supports the municipal programs for boosting the use of green energy. He also said he didn’t see a downside if cities were to tweak their programs to automatically enroll low-income ratepayers in the cheapest tier.
