Selena switched electricity suppliers to save money. In November 2017, a man she knew from her Congress Heights neighborhood knocked on her door with a promise: Switch providers, lower her Pepco electric bill.

But what began as an attempt to lower her monthly costs spiraled into a yearslong merry-go-round of disputed electricity charges, mounting debt, and a chaotic Pepco bill. 

In D.C.’s deregulated electricity market, consumers can choose from among several companies for their electricity supplier. Some advertise cheaper rates, others claim 100 percent renewable energy. Even if customers switch suppliers, Pepco still delivers the power and sends out their bills. 

After seeing her costs spike, Selena, who asks that only her first name be used, says she canceled her service with Star Energy a few months later. But her bills didn’t go down. “My bills have never been that high,” she says. “I thought Pepco had gone crazy.”

In reality, the charges weren’t from Pepco. They were from a rotating roster of eight different companies that enrolled Selena in their services at least 14 times between 2017 and 2021, according to an email she received from Pepco. Along with Star Energy, the list included companies she’d never heard of including MPower Energy, Indra Energy, and Smart Energy.  Selena says she was enrolled without her knowledge and at one point, the list grew to 15 different unknown suppliers on her bill. 

This unauthorized enrollment of consumers into high-interest energy contracts is so common that it has a name: “slamming.”

The practice left Selena—who pays her rent with the help of a government subsidy—thousands of dollars in arrears on her Pepco account. 

Pepco directed her to dispute the charges with the third-party suppliers, but because it took years for her to realize her accounts had been switched around, the companies claimed she wasn’t in their systems, she says. In an email, a Pepco representative advised her to dispute any unauthorized enrollment with the Public Service Commission, but Selena says that her complaint to the PSC didn’t solve the problem either. She was left with no choice but to apply for utility assistance and pay down the accumulated debt.

Last year, Selena found two new suppliers lurking on her Pepco bill. Pepco gave her a new account number—one she now guards vigilantly, she says.

The District’s deregulated energy market is intended to create competition and lower costs, but it has left residential customers like Selena vulnerable to excessive charges and predatory practices, according to a September 2025 report by the DC Department of Energy and Environment. Now, Mayor Muriel Bowser is proposing legislation to enhance consumer protections for residential retail energy customers. 

The DOEE report, which analyzed retail electricity data from July 2023 to August 2024, estimates that residential customers who selected third-party suppliers paid 70 percent more per kilowatt-hour than Pepco’s Standard Offer Service, or SOS as it appears on customers’ bills, resulting in $17.85 million in overpayments for consumers.

Households receiving utility assistance fared even worse, paying 80 percent more per kWh and losing $4.04 million. Although these households make up only 8 percent of all homes, they account for about a quarter of the accounts with third-party electricity suppliers, the report found.

According to Pepco Senior Communications Manager Addie Kauzlarich, third-party suppliers provide electricity to approximately 32,550 residential customers—about 10 percent of the District’s nearly 327,000 residential accounts.

“Unfortunately, DOEE’s findings show that overall, lax rules have meant exploitation of customers,” a spokesperson for DOEE tells City Paper in an email. 

“What took D.C. so long?” Laurel Peltier, chair of the Maryland Energy Advocates Coalition and founder of Retail Energy Revealed, says in reaction to the DOEE report. “Although D.C. is a relatively small residential electricity market, it has produced some of the most extreme retail energy pricing outcomes in the United States.”

DOEE identified predatory practices such as aggressive door-to-door marketing that targets low-income neighborhoods, slamming, and teaser contracts that automatically renew, often resulting in rate plans that can cause sudden and unpredictable spikes in electric bills. Last June, the Office of Attorney General issued a consumer alert about these practices. 

Third-party supplier customers were twice as likely to be in arrears (55 percent) compared with Pepco SOS customers (25 percent); they also have an average monthly arrears of $760—nearly double the SOS average of $404, according to the report. While 40 suppliers operate in the residential space, one supplier controls roughly 25 percent of the market, according to the DOEE report, which does not identify the company.

By contrast, commercial electric customers (such as office buildings and retail stores) thrived under the third-party supplier system. They paid an average of $0.095/kWh—31 percent lower than Pepco SOS rates—and saved $193.57 million over the same period, according to DOEE. Larger commercial entities may have benefited from the leverage to negotiate better rates, according to the report. And while third-party suppliers serve less than one-third of commercial customers, they provide more than 83 percent of all commercial electricity.

Classified as residential, master-metered apartment buildings—where the landlord is the customer rather than individual tenants—showed rates on par with Pepco SOS prices, averaging $0.10/kWh, though arrears per account were high, according to the DOEE report. Because of the small sample size, it’s difficult to make conclusions about the data for this group, the DOEE spokesperson says. 

The high prices are not explained by renewable energy costs, which only add about $0.012/kWh, according to DOEE’s analysis. 

The DOEE analysis also found that the high costs third-party suppliers impose on residential customers are effectively subsidized by taxpayers. Many low-income households using third-party suppliers turn to the District’s utility assistance programs, creating a “burden” on those programs, according to a DOEE slide presentation accompanying the report.

Third-party suppliers further minimize their risk of customer nonpayment by transferring the debt to Pepco through the Purchase of Receivables program. Under the POR program, third-party suppliers sell outstanding consumer debt to Pepco at a discount rate set by the Public Service Commission; Pepco then collects the debt from customers through its monthly bills. 

“That was part of the sweetheart deals these suppliers got when everybody was like, ‘This could be a really good thing. … Maybe they really will lower the price of electricity,’” Peltier says of POR. Now, it’s just another predatory aspect of the market, she adds.

The report found that on average, 4,151 disconnection notices per month were issued to electricity customers in the POR program; 7 percent resulted in disconnections.

The DOEE spokesperson tells City Paper, “these costs are ultimately passed on to all ratepayers, since the ‘Purchase of Receivables’ process allows third-party energy suppliers to offload arrears debt onto Pepco.” 

PSC records reflect a similar concern. While “no part of the POR program costs should be recovered from ratepayers,” the Commission admitted that “there is no simple way to mitigate a high POR Discount Rate without impacting non-POR ratepayers,” in an order approving an increase to Pepco’s discount rate in June 2025. 

In that case, Pepco proposed raising the discount rate from roughly 4 percent to nearly 15 percent, due to a surge in uncollectable debt. Pepco wants a higher discount rate because it assumes the risk that some customers may not pay their bills, while electricity suppliers want a lower rate because the discount reduces how much money they receive. For example, if the discount rate is 15 percent, Pepco pays the supplier $85 for every $100 in receivables it purchases. If the discount rate is only 4 percent, Pepco pays the supplier $96. 

Regulators ultimately settled on an 11.3 percent rate. In a dissent, Commissioner Richard Beverly argued that the rate should be raised to approximately 6 percent so as not to harm the competitive market. Beverly cited concerns of the Retail Energy Supply Association, a lobbying group for third-party suppliers.

The Office of the People’s Counsel has been advocating for ending the POR program since 2012.

“Shifting the burden of bad debt collection to utilities would divert focus from the companies’ core mission of providing safe and reliable service,” OPC warned last year, adding that the “adverse impacts on low-income and residential households far outweigh any gains.”

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OPC was sounding the alarm on these massive residential losses five years before the DOEE report. A 2020 OPC study found that residential consumers overpaid by approximately $20.5 million in a two-year period by purchasing electricity from third-party suppliers.

According to a detailed statement provided to City Paper from the agency, OPC received a total of 2,985 complaints between fiscal years 2023 and 2025, which increased sharply over that period and disproportionately affected residents in Wards 5, 7, and 8.

For electricity customers facing rising household debt and service shutoffs, they were often charged two to three times the standard supply rate. OPC does not have the authority to issue fines—that authority is reserved for PSC—but its interventions have successfully led to account corrections, refunds, and the removal of third-party suppliers, according to a statement from OPC.

Since 2021, out of 4,458 complaints handled by PSC’s Office of Consumer Services, approximately 572 complaints were about third-party utility suppliers (for both electricity and gas), according to spokesperson Whitney Douglas. 

While PSC is tasked with regulating third-party suppliers, Douglas says, “No enforcement actions have been taken against any of these suppliers.”

In contrast to the District, Maryland’s Public Services Commission has initiated enforcement actions against predatory third-party suppliers. Last year, it ordered SmartEnergy—one of the companies on Selena’s account—to refund $6.5 million to more than 32,000 customers following a six-year battle over deceptive telephone marketing and illegal enrollment practices.

The New York State Public Service Commission has been equally aggressive in its oversight of third-party suppliers. Last year, the commission approved a settlement requiring nine NRG Energy-affiliated companies to pay $50 million in billing adjustments to 278,000 current and former customers in the state.

New York has also gone after MPower Energy, a company that was added as a supplier on Selena’s account four times without her knowledge. While New York has not banned MPower, the company is currently facing a pending legal proceeding to revoke its license due to allegations of deceptive marketing and unauthorized customer enrollments. 

In 2019 and 2021, MPower was hit with class action suits in New York and New Jersey alleging deceptive business practices. The company managed to stall these legal challenges by effectively moving the disputes out of the courtroom and into individual arbitration. 

MPower’s annual compliance reports filed with D.C.’s PSC reveal the company’s rapid growth in the District. The company’s annual electricity sales in D.C. increased nearly 20-fold between 2021 and 2025, jumping from 1,254 MWh to 25,316 MWh.

According to D.C.’s OPC, MPower was the target of 260 complaints between fiscal year 2023 and fiscal year 2025, the second highest number during that time frame.

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Across several states with third-party electricity suppliers, similar data has shown that residential customers—especially low-income households—were more likely to enroll with third-party suppliers, be charged higher rates, and experience higher average losses.

A 2021 Wall Street Journal investigation found that residential consumers in deregulated markets have overpaid by more than $1 billion annually compared with standard utility rates. 

In a March 2026 report, Massachusetts found that residential electric supply customers lost an estimated $738.7 million over 10 years. In Maine, residential consumers lost $156 million from 2016 to 2024. Pennsylvania consumers have overpaid by more than $205 million since 2015.

Across the border, Maryland has effectively dismantled its retail energy market. The law, which took effect in July 2024, introduced major reforms, including mandated price caps, contract limits, and licensing requirements for salespeople. It also prohibits Pepco from purchasing customers’ debt from third-party suppliers.

Six years earlier, Maryland’s Office of People’s Counsel presented a report that found the state’s consumers paid approximately $54.9 million more for electricity and gas than if they had purchased energy from their utilities.

Peltier, whose own reporting has been influential in Maryland, says there are currently no retail supply offers in the state because of the new protections, but powerful industry groups, such as the Retail Energy Advancement League, which was founded by a coalition of major retail energy companies collectively worth billions, continue to push the benefits of “choice.” 

On its website, the organization is currently “advocating for legislative changes that will return energy choice to customers, create energy resilience in Maryland, and deliver a positive customer experience.”

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The DOEE report recommended several measures to protect consumers from high electricity costs. They include capping residential rates to Pepco’s standard utility prices, banning early termination fees, and ensuring households on utility assistance pay no more than the standard rate. Variable-rate and short-term contracts, with rates that could suddenly spike or automatically renew at higher rates, should also be prohibited, according to the agency’s recommendations. 

The report also calls for regular reporting of third-party supplier financial and sales data, restrictions on POR debt purchasing, and exploring community energy programs that let neighborhoods buy power in bulk to save money. 

Bowser’s energy reform legislation, which is included in the 2026 Budget Support Act, largely aligns with DOEE’s recommendations. It adds reporting requirements, establishes residential price caps at 110 percent of Pepco’s standard rate (with PSC-approved exceptions for innovative services), prohibits early termination fees, and holds third-party suppliers liable for predatory sales tactics. 

While noting that the legislation stops short of eliminating the controversial POR system, Peltier tells City Paper, overall, it’s a win for District residents. 

Bowser’s approach would tighten the rules while keeping the market alive. It hinges on the oversight of a PSC board, whose members are appointed by the mayor, which has made little effort to rein in suppliers and currently faces a deep lack of trust with residents who are already furious over the agency’s approval of excessive Pepco rate hikes. 

Compounding the friction is the commission’s refusal to issue customer refunds in light of a decision by the D.C. Court of Appeals vacating the PSC-approved two-year rate hike plan. Instead, PSC has chosen to keep electricity rates at the levels approved in the order that was rejected by the court until a new order is issued in the future.

In a press release this month, the Office of the People’s Counsel slammed the commission’s inaction.

“The Court clearly ruled the process by which the rates were set was flawed. But the Commission finds it appropriate to require the public to wait to learn whether it will receive any justice at all, while Pepco can continue ‘business as usual,’” Deputy People’s Counsel Karen Sistrunk says. 

Ward 4 Councilmember Janeese Lewis George and former At-Large Councilmember Kenyan McDuffie, both of whom are running for mayor, have championed stringent retail market oversight and expanded PSC powers to penalize deceptive providers, according to responses from their respective campaigns to City Paper’s questions. 

Lewis George, in a statement from her communications director Amanda Michelle Gomez, promises to appoint PSC commissioners who will fight for families: “Many Washingtonians are being exploited and paying more for less,” the statement says. She pledges to keep bills in check while advancing affordable clean energy. “DC cannot continue to have lax utility regulation,” she adds. (Gomez is a former City Paper reporter.)

McDuffie, through press secretary Christian Herald, vows to “end predatory tactics by third-party suppliers through an aggressive enforcement mandate,” while arguing that utility requests must benefit residents “not company shareholders.” He says “lower costs, reliable service, and real transparency will be the North Star,” promising not to support any commissioner who doesn’t meet this “litmus test.”

McDuffie’s critics, such as Sierra Club Political Committee Chair Mark Rodeffer, challenge his record.   

“When former councilmember Kenyan McDuffie was responsible for oversight of the PSC, he provided none,” Rodeffer says in written testimony to the D.C. Council. “He never meaningfully challenged the commissioners on the skyrocketing utility rates that they rubber-stamped.”

Despite the alarming DOEE report, and Bowser’s proposals to address the issue, third-party suppliers are still out in force. 

Last month in Columbia Heights, I came across representatives for IDT Energy who were soliciting residents with ease (the company has racked up 170 OPC consumer complaints). As I walked past their table, they handed me a flyer and gave me the pitch: “Come back with your utility bill and an ID.” That small request is the first step into a marketplace that many find impossible to navigate. 

“A buyer beware market is not good public policy for an essential service,” Peltier warns. “It’s sad because it’s just been going on for far too long.”