Direct Energy Advocates for Retail Market Improvements for Customers in Massachusetts

Energy supplier adds price protection to residential electric variable rates in Massachusetts and supports greater customer protections

May 13, 2014, 09:15 ET from Direct Energy

BOSTON, May 13, 2014 /PRNewswire/ -- The impacts of the recent, unprecedented Polar Vortex have highlighted the potential for improvements so that customers are better protected from extraordinarily high energy bills during short term market events. Direct Energy, North America's largest energy and energy-related services provider, is announcing today that effective immediately, the Company will add a price protection feature to its current residential electric variable rates in each Massachusetts utility service area in which the Company serves. While Direct Energy offers fixed rate contract plans that provide price stability for its residential power customers, this new product feature combines the flexibility of a month-to-month variable plan with protection against unexpected price spikes. "Direct Energy's price protection will provide our customers who migrate to a variable rate product with the peace of mind of knowing the upside of price risks," said David Hindman, vice president and general manager of Direct Energy's U.S. residential business.  

Direct Energy's price protection level for its residential electric variable rates in Massachusetts is 16.6 cents per kilowatt-hour, and the Company is committing to this price protection level for the May-October period. Direct Energy's specific maximum variable rate with price protection is for the National Grid Massachusetts Electric (MECO) utility area, where Direct Energy serves residential customers.

By offering this level of price certainty, Direct Energy will continue to serve its customers with competitive pricing which may be lower than, but will not exceed these levels during this period.

After the initial six month period, to the extent that Direct Energy determines it needs to adjust its price protection level, Direct Energy also commits to provide its residential customers with a minimum of 30 days advance notice prior to making a change so that customers may make informed decisions regarding which plan is right for them.

Direct Energy has been working closely with stakeholders to enhance the competitive marketplace across the state. In addition to its voluntary actions announced today, Direct Energy is proposing the following improvements to the state's competitive retail energy market to enable customers to have both choice and control of their energy bills:

  • A new standard for retail suppliers to offer residential variable electric rates with price protection. Direct Energy believes that all retail suppliers should provide a specific cents-per-kilowatt-hour maximum variable rate for any residential variable electric price products and provide customers 30 days advance notice of any changes the retail supplier makes to that price protection level. This gives customers the ability to make better budgeting, shopping and switching decisions.
  • Clearer customer disclosures. Direct Energy believes all suppliers should be required to identify and communicate clearly to customers all pricing and term information, any early termination penalties and the details for how the supplier will serve the customer after the expiration of any initial contract period.
  • Accelerated switching to retail suppliers. Currently, when a customer wants to change retail suppliers, the process can take one to two billing cycles to complete. Direct Energy supports working with stakeholders to make efforts to ultimately move to a same-day switch model that will directly benefit electricity consumers seeking alternative pricing option.
  • Full smart meter deployment and timely access to usage data. Smart meters enable retail suppliers like Direct Energy to offer advanced products and services. This not only fosters greater customer empowerment and engagement but also gives customers more control of their energy usage and bills. Direct Energy already offers several innovative products that use smart technology to help customers manage their energy use, which can be particularly helpful during unpredictable weather conditions. Full smart meter deployment would enable Direct Energy and other suppliers to offer more of these types of products and services across the state.

"Direct Energy has listened to our customers and we believe these proposed improvements will make the retail market a more simple, friendly and direct environment for all customers to better realize the benefits of competition," added Hindman. "In addition to these priority areas, Direct Energy also supports enhancements that include increasing the financial fitness standards for retail suppliers, stronger enforcement against suppliers and sales representatives that violate customer protection regulations, and new measures to promote fixed price contracts."

"We continue to work to provide integrated home services and cost-effective energy products within competitive markets because we understand the benefits they can bring to our customers."


  • The residential electric variable rate price protection does not include incremental services procured including but not limited to: green products, rewards, home services, or other non-energy related items.
  • The residential electric variable price protection levels are the absolute highest rates pending any future regulatory or legislative changes that impose greater costs on retailers
  • The rates indicated above will automatically go into effect. Current Direct Energy customers do not need to voluntarily enroll.

About Direct Energy

Direct Energy is one of North America's largest energy and energy-related services providers with six million residential and commercial customer relationships. Direct Energy provides customers with choice and support in managing their energy costs through a portfolio of innovative products and services. A subsidiary of Centrica plc (LSE:CNA), one of the world's leading integrated energy companies, Direct Energy operates in 46 U.S. states plus the District of Columbia and 10 provinces in Canada. 

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SOURCE Direct Energy