Do Healey, Baker have a truce?

ATTORNEY GENERAL MAURA HEALEY and the Baker administration engaged in an interesting political dance on Tuesday at a legislative hearing on what to do about companies that sell electricity to residential customers.

By her own admission, Healey, the Democrat, has staked out a fairly extreme position. She feels the 50 companies have ripped off consumers for so long that the only thing to do is to put them out of business. “I understand it’s a big deal to call for an end to the industry. It’s not something I do lightly,” she told a hearing of the Telecommunications, Utilities, and Energy Committee. “Some will prefer a more modest, incremental approach.”

And then up stepped the Baker administration, which indeed favored a more modest, incremental approach but expressed that position in a way that was not strident or critical of Healey. Indeed, aides to the Republican governor praised Healey for conducting a study that indicated the electricity sellers were targeting low-income customers with misleading sales pitches that ended up costing them a lot more money.

The tone of the comments suggested the attorney general and the governor had some sort of understanding not to attack each other. Healey and her aides, for example, didn’t draw attention to the fact that the companies she wants to eliminate for deceptive sales practices are regulated by the governor’s Department of Public Utilities. And Baker’s aides went out of their way to avoid saying anything negative about Healey’s bid to abolish 50 businesses.

“We should weigh everything before making that decision,” was as far as Patrick Woodcock, the assistant secretary of energy, would go. “This would be a very consequential decision for the Commonwealth.”

Legislators on the committee were clearly wary of axing an industry. They said they preferred competition, and urged Healey to go after the bad actors in the industry instead of running them all out of business. “There’s got to be a way to fix it,” said Rep. Daniel Cahill of Lynn.

Aides to Healey said they didn’t think there was. They said the office of the attorney general negotiated multimillion-dollar settlements with two of the electricity sellers, but the penalties did nothing to deter bad behavior by other companies. The aides said the residential electricity market, created when the electricity business was deregulated in 1998, isn’t working.

“We’re 20 years in and, from our perspective, the experiment has failed,” said Elizabeth Mahony, an assistant attorney general.

Nathan Forster, the deputy chief of Healey’s energy and telecommunications division, said the attorney general is not asking lawmakers to eliminate competition but to choose a better form of competition. He noted residential customers can purchase electricity one of two ways. They can buy from one of the competitive sellers, or they can go with basic service, where utilities solicit bids for electricity twice a year on behalf of customers who don’t choose their own supplier.

Forster argued basic service is a form of competition because the utilities, acting as a proxy for the customer, select the lowest bidder. Forster compared the situation to a customer shopping at Costco: with its enormous buying power, Costco can buy mayonnaise cheap and pass the savings along to its customers.

Lawmakers pressed Woodcock and Matt Nelson, the head of the electric power division at the Department of Public Utilities, on how they would regulate the electricity sellers differently. The officials said the DPU needs to create more transparency in the marketplace, do a better job of educating customers, and stamp out fraud. Woodcock indicated all types of initiatives to clean up the industry are on the table, including banning door-to-door sales and issuing fines. “No state has figured this out,” said Woodcock. “It will be a challenge.”

It’s likely to be quite a challenge for the DPU. Rep. Frank Moran of Lawrence asked Nelson if the DPU had enough manpower to regulate the electricity sellers more closely, and he said “no.”