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Angela O'Connor, chairman of the Massachusetts Department of Public Utilities

(SHIRA SCHOENBERG / THE REPUBLICAN)

In January, Virginia White, 72, a Springfield retiree, saw her electricity bill jump from $150 to $250 a month. So when electricity suppliers started sending her information advertising a cheaper rate, White took one.

She signed up with a new supplier, just as she had done once before. Then she got a notice from Western Massachusetts Electric, now Eversource, that her $250 bill had been cancelled and she instead owed $800 for two months.

White was infuriated. "You just can't do that in most businesses," White said. "That was a service I already got, used, and paid for, and they're charging me double."

No one told White that switching to a new supplier would cause a retroactive rate hike, and she cannot return to Eversouce without paying a fee.

"Either way, I was losing out," White said.

White's bill was the result of a 15-year-old rule that has resulted in some residents who switch electricity suppliers being slapped with unexpected bills for hundreds of dollars. A coalition of Western Massachusetts lawmakers is asking the Department of Public Utilities to rescind the rule.

"It didn't make sense to me," said state Sen. Don Humason, R-Westfield, who organized the effort. "It's almost like a punitive action on the part of the DPU and the provider."

The DPU has been considering eliminating the "bill recalculation" rule as part of a broader initiative to improve regulation of electricity suppliers. Angie O'Connor, chairman of the DPU, said in light of the public outcry, the department plans to expedite its consideration of the rule.

"Certainly, understanding the level of public concern, this is something we're going to pull out right away and get to work on it and get it out as quickly as we can," O'Connor said in an interview. She would not provide an exact time frame.

The rule was implemented in 2000, shortly after Massachusetts allowed competition among electricity suppliers. Under state law, customers can pay either a fixed-price option for their electricity, where the price remains steady over six months based on the average electricity cost, or a variable-price option, where prices change monthly with the market. Residential customers and small businesses are automatically given the fixed-price option unless they choose otherwise.

In order to avoid suppliers gaming the system by moving customers from a basic fixed-rate plan to another plan depending on that month's prices, the DPU said if a person paying a fixed rate leaves one supplier and moves to another in the middle of a six-month rate period, they must be billed retroactively for the variable price for the months in which they received service. For example, January and February are the highest cost months for energy, but a fixed rate plan averages those costs with the lower costs for May and June. If a person picks a new supplier in March, however, he must pay the actual energy cost for February.

Eversource, which distributes electricity in Western Massachusetts, has a rate period that runs from Jan. 1 to June 30. Recently, with electricity rates spiking, more families and businesses have begun to look for more competitive options than the basic fixed rate. But when they switch suppliers, they have been billed for hundreds of dollars retroactively.

"I think most consumers who thought they were doing the right thing for themselves and their own personal finances by going to a lower cost supplier, unfortunately, they were not informed that by doing this, the fixed rate that they were under in Eversource ... was going to a variable rate and they would get charged retroactively," said state Rep. Jose Tosado, D-Springfield, a member of the Joint Committee on Consumer Protection and Professional Licensure. "They end up getting a whopping bill from the prior provider."

"People live on fixed incomes, and they really can't afford to absorb an unexpected bill, particularly a bill of that nature," Tosado said.

The letter, signed by nine Western Massachusetts senators and representatives, said some customers had seen their rates rise retroactively from 14.5 cents per kilowatt to 21 cents per kilowatt. "The consequence ... is that ratepayers are penalized for their attempts at saving their families or businesses money when many households are struggling with day-to-day finances," they wrote.

In December, the Department of Public Utilities recommended keeping the recalculation provision for larger businesses, but eliminating it for residential and small business customers. The smaller customers, officials wrote, are low users of electricity and are less likely to game the system by strategically switching between plans.

"We are concerned that this practice could result in customer confusion and dissatisfaction because customers may perceive the bill recalculation charge, appearing on their electric bills, to be a penalty for leaving basic service and switching to a competitive supplier," department officials wrote.

The department is in the process of developing a final policy. But meanwhile, on the same day Humason sent the legislative letter, O'Connor wrote to electricity suppliers and distributors requiring the distributors and urging the suppliers to notify customers about the recalculation costs.

"It is vital that customers have a full understanding of all charges in order to make an informed choice about their electricity supply options," O'Connor wrote.

In an interview, O'Connor said the department reacted as soon as it was informed that customers were not getting any notice. "I think it's a matter of transparency and having customers understand what they have to pay for," O'Connor said. The department is also developing a website where customers can compare plans from electricity suppliers.

"Massachusetts supports competition. The department supports competition," O'Connor said. "Our goal is to be as transparent as we possibly can with the customer, so they fully understand what their options are."

Eversource supports eliminating the rule. "In (Eversource's) experience, this bill recalculation process causes significant customer confusion which, in turn, creates significant administrative burdens on ... personnel," company officials wrote to the DPU.

Priscilla Ress, an Eversource spokeswoman, said the practice causes customer dissatisfaction, and customers see it as a penalty for switching suppliers. "We do understand that this has been a very rough haul for our customers, from a terrible, brutal winter to a spike in the cost of electricity and then bill recalculation charges," Ress said. "So we are sympathetic and that's also why we submitted these comments."

The Retail Energy Supply Association also supports eliminating the rule, arguing that the billing angers customers and causes some to switch back to their original provider, limiting competition.

Assistant attorneys general under Attorney General Martha Coakley wrote to the DPU that the attorney general would not oppose lifting the rule on a trial basis. However, they said the DPU should monitor the results to avoid a situation where large numbers of people move to competitive suppliers for low-cost months, then buy from utilities in high-cost months. This would drive up prices for all customers who buy basic electricity services from the utilities. The attorney general represents utility ratepayers.

Jillian Fennimore, a spokeswoman for Attorney General Maura Healey, said, "We support DPU's openness to considering alternatives to bill recalculation, which can lead to unexpected increases in consumers' bills."

Fennimore said Healey believes utilities, regulators and suppliers should be transparent about how rates are set.