Resources for the Future
DOEE Third-Party Energy Suppliers in the District
DC residents can buy electricity from the local electric utility or over 40 other companies, referred to as third-party suppliers. Suppliers may charge different customers different prices, and many customers end up paying more than they need to. We will contact low- to moderate-income electricity customers who get help paying for electricity from the Department of Energy and Environment (DOEE) to provide personalized information about their electricity service. We will test whether customers we contact switch suppliers more than customers we do not contact.
Why is this issue important in DC?
If customers who receive help paying their electric bills from DOEE pay higher prices, they are more likely to fall behind on their electric bills. Customers who fall behind on their bills can have their electricity disconnected. They also need more utility assistance funds from DOEE, which means that DOEE can help fewer people with the resources available.
In 2023, 28% of DC residents receiving utility assistance had a third-party supplier for at least one month of the year. These customers’ electric bills were over 1.5 times higher, on average, and they had over 2 times more in late, unpaid bills.1 Research suggests that many people don’t realize they could be paying a lower price for electricity.2 The price of electricity provided by DC’s local electric utility is stable and relatively low. The price of electricity from other suppliers can vary more and is often higher, creating more risk that customers pay higher prices than they need to.
What are we doing?
We will randomly send some customers a letter, email or text message to let them know what price they pay, how it differs from the local utility’s price, and what steps they can take if they want to switch suppliers. We’ll compare the number of people who switch in the group that we contact to the number of people who switch in the group we do not contact. This will let us determine if our outreach encouraged people to switch suppliers and which form of outreach was most effective.
What have we learned?
We expect results in 2025.
What comes next?
The results will help DOEE decide whether to continue to send letters, emails or texts to help residents understand their electric bills and, hopefully, lower their bills.
What is happening behind the scenes?
We tested messages with volunteers recruited at a DC recreation center event. We also tested messages through an online user testing platform where we could recruit testers with demographic information like the group of people our experiment will contact. This feedback has helped us design shorter, clearer letters and text messages.
“DOEE strives to keep residents’ utility bills affordable, especially among low-income residents. Finding cost-effective tools to help customers choose the right electricity suppliers for their needs and budgets is an important part of how we serve the District’s electricity customers.”