News  Retail Electricity Supplier Pays More than $1.65 Million for Knowingly Avoiding its Payment Obligation to State Environmental Programs

A company that sold electricity to Massachusetts customers has paid more than $1.65 million to resolve allegations that it knowingly failed to make payments to the Commonwealth under three state environmental programs, Attorney General Maura Healey and Inspector General Glenn A. Cunha announced.

Utility Expense Reduction, LLC, (UER) a New York-based company, operated as an electricity supplier in Massachusetts from 2016 to 2019. Companies selling electricity to Massachusetts customers must obtain a certain percentage of their electricity each year from renewable, alternative and clean energy sources. If they do not obtain electricity from these sources, companies are instead required to make an annual payment that goes towards accelerating the clean energy sector and supporting programs to mitigate the impacts of climate change. The Commonwealth instituted these requirements to promote the use of renewable, alternative and clean energy; encourage energy efficiency; and reduce greenhouse gas emissions. The Massachusetts Department of Energy Resources (DOER) and Massachusetts Department of Environmental Protection (MassDEP) oversee compliance with the programs.

The Commonwealth alleges UER failed to obtain the required renewable, alternative or clean energy for 2018 or 2019, and knowingly avoided its obligation to make the required payments for either year.  Instead, UER left the Massachusetts electricity market in 2019, owing over $825,000 to the state’s environmental programs.

In a complaint and consent judgment filed in Suffolk Superior Court, the Attorney General and the Inspector General allege that the company violated the Massachusetts False Claims Act when it knowingly avoided its obligation to make required payments under the state’s renewable and clean energy programs. In addition, the Attorney General and the Inspector General allege that UER’s conduct also violated the Consumer Protection Act and several environmental statutes, including the Renewable Energy Portfolio Standard, the Alternative Renewable Energy Portfolio Standard and the Clean Air Act.

“As the existential threat of climate change grows, our electricity markets must support all the clean energy resources we need,” AG Healey said. “Massachusetts consumers have a right under our laws to access clean energy, which is why we’re holding this company accountable for evading its obligations and shorting the state’s clean energy and climate change mitigation programs.”

“It is vitally important that companies that obtain the benefits of operating in the state pay the money they owe to the Commonwealth,” Inspector General Cunha said. “In failing to do so, UER gained an unfair financial windfall and withheld important funding from the state.”

“Greenhouse gases contribute to climate change. The Global Warming Solutions Act and Clean Energy Standard established requirements for retail sellers of electricity to provide clean and renewable sources of energy to their customers to reduce greenhouse gas emissions,” said MassDEP Commissioner Martin Suuberg. “If retail sellers of electricity purport to supply customers with energy from clean and renewables sources, but then fail to do so, they harm not only the environment, but also citizens of the Commonwealth. MassDEP, DOER, the Inspector General and the Office of the Attorney General will continue to work together to hold violators responsible for causing such harm."

“The Commonwealth’s ambitious energy and climate agenda requires confidence that our electric suppliers are meeting their obligations to our clean energy laws and regulations,” said Patrick C. Woodcock, Commissioner, Massachusetts Department of Energy Resources. “The renewable standards in our electric supply are essential to achieve the Global Warming Solutions Act’s greenhouse gas (GHG) emission reduction goals, and to develop a clean, affordable, equitable and reliable energy system. We appreciate collaborating with the Office of the Inspector General and the Attorney General’s Office to ensure compliance of our electricity suppliers and are pleased with the outcome of putting this funding to work for Massachusetts’ energy and environmental goals.”

Under the terms of the agreement, UER has paid over $1.65 million, including restitution and penalties, and will not operate in the Commonwealth for five years.

This case was handled by Lead Counsel Meghan MacKenzie of the Office of the Inspector General (OIG) and Deputy Division Chief Christina Chan of the Attorney General’s False Claims Division, with assistance from False Claims Division Chief Amy Crafts, Assistant Attorney General Tracy Triplett of the Attorney General’s Environmental Protection Division, Assistant Attorney General Jacquelyn Bihrle of the Attorney General’s Energy and Telecommunications Division, and OIG Civil Recovery Unit Director and Senior Counsel William Durkin.

MassDEP Counsel Jennifer Davis, Senior Financial Analyst Holly Lee, Counsel Jenny Outman, and Environmental Investigators Stephen Spencer and Timothy Dame; as well as DOER Legal Counsel Colin Carroll and General Counsel Robert Hoaglund also assisted with this case.

The Attorney General’s False Claims Division safeguards public funds by enforcing high standards of integrity against companies and individuals that make false statements to obtain government contracts or funds. Anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds is urged to contact the False Claims Division’s tip line at 617-963-2600.

The OIG’s Civil Recovery Unit helps state agencies and local governments identify and bring back public funds lost as a result of fraud, waste or abuse. With the approval of the Attorney General, the OIG is authorized to commence civil recovery actions on behalf of the Commonwealth in the appropriate state or federal court. The OIG operates a hotline for anyone to report fraud or other suspected wrongdoing involving public funds or property by contacting 800-322-1323 or IGO-FightFraud@mass.gov.