(MyFoxBoston.com) -- They thought were lowering their electric bills. But, it came at a cost. Local homeowners tell FOX 25 News they were penalized when they switched to another provider after shopping for a lower rate.
FOX 25's Kerry Kavanaugh learned the retroactive rate hike is known as bill recalculation. State rules require electric companies to do it.
For some customers, it's another round of sticker shock.
"I didn't know that if I went to another company, I was going to be penalized for it,â Plymouth homeowner Doug Montanari said.
Montanari said he thought he was being smart when he shopped around for a lower electric rate. He knew rates were set to spike at the start of winter. When he found a lower rate, he made the switch.
"The following bill came over and it was like, âWhoa, what happened here?'" he said. "Apparently, unbeknownst to me I was in a contract deal with them, locked in for six months. Because I canceled it before it was over, I kind of got back-charged.â
Montanari showed Kavanaugh the bill from the supplier he was leaving, Eversource. His new one was even higher than the last at $201.78.
Bill recalculation happens when customers on a fixed rate leave for another company. The bill is recalculated at the regular rate and the customer pays the difference.
The Massachusetts Department of Public Utilities, which sets the rules, says it's something now under review.
The DPU sent a letter to all Massachusetts electric companies writing about complaints from customers unaware of the bill calculation provision, and asked that companies clearly inform customers about it. Click here to read that letter.
The state Attorney General's office wants to go a step further. They sent a letter asking the DPU to eliminate the requirement on a trial basis. Click here to read that letter.
Meanwhile, customers like Montanari, are paying up.
"I would like them to be more fair to the consumer and to be more standardized," Montanari said.
For its part, Eversource, says they agree the rule is confusing, but it is one they are forced to follow.
In a statement to FOX25, spokesperson Rhiannon D'Angelo said:
âGiven the recent confusion, our customer service reps take extra care to explain the law in detail when a customer calls with questions about switching to a competitive supplier. We also communicate with our customers who are on the basic service fixed rate and are considering switching over to a competitive supplier in a number of ways, including:
- Language on website: https://www.eversource.com/Content/ema-e/residential/my-account/choose-competitive-alternate-supplier
- Competitive supplier calculator tool: https://www.eversource.com/nstar/CustomerCare/residential/SupplierCalculator
The state says sometimes bill recalculation can actually be to the benefit of the consumer, in which case they would get a credit. But either way, they say it should not come as surprise.
- Energy label bill insert
- Customer service reps.
FOX 25 has heard from hundreds of our viewers struggling to pay their bills. Some saw winter rate hikes as high as 37 percent over last year.
The electric companies say they don't make any profit on the electricity supply, and by law they charge the exact price they pay for it.
They say the extreme winter and electricity generators increasing prices has led to higher bills. Last week, National Grid announced it would lower its rates 26 percent come April.