For David Berends, it was the incessant mailings, all of them promising renewable electricity at an only slightly elevated price, that persuaded him to sign up for CleanChoice Energy in 2020.
“Maybe it was just their persistence that won me over,” the New Jersey resident told The Daily Beast of the Washington, D.C.-based company that describes itself as a “competitive electricity supplier.”
“I just wanted to do the right thing from an environmental perspective,” Berends added.
But month-over-month, the kilowatt-hour charge kept rising, until it had gone up by nearly 15 cents, costing him more than double what he was paying before the switch, he said.
“I just don’t like the fact that I don’t know what my rate is going to be and they’re going to arbitrarily raise it to whatever they want it to be,” he complained. “There was no transparency: it was, ‘Oh, you’re a libtard and you’re green, just trust us.’” (“Libtard” is a popular internet portmanteau of “liberal” and “retard.”)
Finally, the last snatches of Hurricane Ida left Berends stuck pumping water out of his property last year—and smacked him with a $260 bill for the month of September, he recalled. He said he called the company and got his contract discontinued soon afterward.
While at first glance, CleanChoice Energy may look like just another green brand catering to deep-blue consumers, the clean-energy company’s business practices and tactics have customers, advocates, and watchdogs all seeing red.
Interviews with former customers, experts, and a review of both official and online complaints point to a disturbing pattern of behavior for CleanChoice, which advertises itself in eight states and the District of Columbia as a green alternative to local utility companies. Critics say the firm targets well-intentioned progressives with postal advertising, sharply spiking prices, and a fundamentally misleading for-profit business model that capitalizes on a lack of popular understanding about how electrical grids operate.
“They prey on the ignorance of people about how green energy works,” Martin Cohen, a Chicago-based green energy consultant and former state director of consumer affairs, told The Daily Beast.
In statements to The Daily Beast, a CleanChoice spokesperson maintained the company is upfront with customers about the higher bills they will pay, and blamed drastic price spikes on conditions in the larger energy market.
“We aren’t aware of other businesses in energy who take this extraordinary step to tell consumers that their service is more expensive,” a company spokesperson wrote. “Recently, there has been a lot of energy inflation. It has been well-reported that energy prices have been volatile and inflationary through the last year.”
But some customers The Daily Beast interviewed said that their local utility companies’ prices did not rise anywhere near as steeply, suggesting CleanChoice’s hikes were hardly in line with a broader trend. The company retorted that, compared to highly regulated utility companies, it suffers greater financial exposure to global fluctuations and thus must pass more costs immediately onto consumers.
For his part, Sam Duerr of Pittsburgh reported an experience similar to Berends’ over almost the exact same period—except he said he didn’t even realize he was a CleanChoice customer until it was too late, thanks to the company’s advertising strategy.
He recalled being “bombarded” in 2020 with what appeared to be promotions from his electricity provider, the Duquesne Light Company, offering renewably sourced electricity for only a little more per kilowatt-hour than he was then paying. Like Berends, Duerr is an engineer and passionate about environmental issues, and decided saving the planet was worth the extra cash out of his pocket.
Duerr said it wasn’t until the summer of 2021, when his electricity rate was three times his previous cost, that he called the local company and learned he was in a contract with CleanChoice Energy.
“I had no idea this company I was going through was CleanChoice Energy, I just thought it was my current provider Duquesne Light providing renewable energy from the grid,” said Duerr, who believes the solicitations he received were deceptive. They “look[ed] like they were from the power company that was supplying my energy,” he said.
Duerr, too, arranged to have his service severed. But when he sought to do so, he said, CleanChoice first offered to lock him in at a far lower rate, leading him to believe something other than market forces was impacting his bills.
Alex, a resident of New York City who asked The Daily Beast to withhold his last name to protect his privacy, likewise jumped ship after a negative experience with CleanChoice. Also highly educated and interested in reducing his carbon footprint, also the recipient of a profusion of promotions promising green energy at a low cost, Alex said he decided to subscribe in 2019.
“They said [roughly], You won’t notice any change or interruption to your energy supply. Everything will be the same except sourced from green energy sources,” he recalled reading on the mailers. “What could be the downside, you know?”
Last summer answered that question, when his rate hit 27 cents per kilowatt-hour, three times the Consolidated Edison price, he told The Daily Beast.
“I had months where I wasn’t even in my apartment and didn’t even use the AC, and still the bill was incredibly high,” Alex added.
Besides its core environmental appeal, it’s easy to see why customers might be inclined to give the company a try. After all, the firm touts a 4.2 out of five star rating on its Facebook page.
But upon closer inspection, except for apparent spam posts promoting cryptocurrency trading, every review written in the past year is a negative one.
“Active GARBAGE. Silently raising the rates to the point where we were spending TRIPLE on the amount of our earlier energy bill (WHEN WE WEREN’T HOME FOR 20 DAYS OF THE MONTH),” reads the most recent assessment, from earlier this month.
“I need for the potential customers to know how much of a SCAM this company is!” another incensed self-identified former subscriber wrote just weeks ago. “In the beginning it was fine, just $70 more, but then in the middle of a cold winter and the pandemic, all of a sudden, my bills went from 170 here or 200 there, to now 300… 400… 500… 600!”
“Constant price increase,” lamented a third. “And lack of communication with price increases.”
Similarly, despite boasting an A+ rating from the Better Business Bureau, the company’s page hosts 133 complaints, most regarding marketing practices and rapidly escalating rates. For comparison, California’s much-maligned Pacific Gas & Electric company—the nation’s largest utility, serving more than five million households—has 192 complaints on its page. CleanChoice purports to have customers only totaling in the hundreds of thousands.
CleanChoice’s business practices have also repeatedly drawn scrutiny and penalties from state and local governments.
In 2015, CleanChoice—still going by its original moniker “Ethical Electric”—inked an “Assurance of Voluntary Compliance” with the Pennsylvania Attorney General’s office, which had responded to complaints from consumers about the company’s mailers. These, the office found, could give recipients the incorrect impression that they came from their current power provider, prominently featuring other utility companies’ names and phrases such as “Important” and “Second Notice.”
The firm paid a small fine and admitted no wrongdoing.
More severe was the settlement the company reached with the Illinois Attorney General the following year. The state’s highest law enforcement official charged that the company had misrepresented the source of its advertised “Clean Energy Option.” The Attorney General determined that this power in fact originated from multiple renewable and nonrenewable sources, and not purely from wind and solar, contrary to what its direct mail campaign conveyed to consumers. The office estimated refunds could approach $3 million.
Ethical Electric subsequently changed its name to CleanChoice, though it claimed to The Daily Beast the switch had nothing to do with the settlement.
In 2017, the town of Acton, Massachusetts, filed a complaint with the stateregarding an advertising inundation from the freshly rechristened CleanChoice, a marketing campaign that coincided with the municipality’s rollout of a collective plan to supply residents with renewable electricity. The Boston suburb’s grievances were familiar: CleanChoice’s mail solicitations had the appearance of an official communication, with “Notice” printed on the outside of a tear-off envelope, “the type used for government checks.”
Acton’s gripes extended to the letters’ contents, as well.
“The name of the firm, CleanChoice Energy, does not appear at the top of the page in bold or colored type as is typical for a business communication. In fact, there is no logo or corporate branding anywhere on the page. The company name only appears at the very bottom, as part of the signature block, where an unsuspecting consumer would miss it,” wrote the city manager. “This is not the work of a reputable corporate firm trying to persuade customers of the strength of their brand; it is the work of a trickster trying to deceive customers into thinking they are something that they are not.”
The Massachusetts Department of Public Utilities did not respond to repeated requests about whether or how it adjudicated the complaint, though CleanChoice insisted that it never resulted in any regulatory action. Nonetheless, the firm conceded ethical lapses in its past advertising and asserted it has since mended its ways, and now conforms to all state and federal rules.
“We acknowledge that our company has made mistakes,” a spokesperson said. “We have modified our business practices in accordance with ever-evolving regulatory reform across our footprint.”
But complaints on the CleanChoice Facebook page from as recently as December 2021 feature images of solicitations with the name of a local utility firm and “Second Notice” visible from the outside, or else suggesting a problem with the recipient’s service.
And in Illinois, the Citizens Utility Board—a state-created watchdog group—is helping the nonprofit Environmental Law and Policy Center pursue the company with allegations of deceptive business practices.
“CleanChoice is one of the more notorious suppliers currently active in the state,” said CUB spokesman Jim Chilsen, who indicated his group does not provide exact numbers and details on complaints it receives. “They have generated hundreds of complaints or inquiries over the years, including consumers who have paid punishingly higher rates by signing up with the supplier or from people just confused by the offers.”
Like all the experts The Daily Beast consulted, Chilsen noted that CleanChoice operates at the unregulated edges of the American energy market. Its image problems are ironic not just because of its former branding as “Ethical Electric,” but because of the company’s roots in the progressive movement.
Clean Choice President and CEO Tom Matzzie launched Ethical Electric in 2011 after a career in Democratic Party politics, which included stints as an operative for the 2004 John Kerry presidential campaign and a director for MoveOn.org. His co-founder, who has since departed the firm, was Richard Graves, a climate activist and co-creator of Solidaire, an organization that encourages individuals of inherited wealth to bankroll progressive causes. (Graves did not respond to a request for comment.)
Two years after its founding, the firm partnered with Barack Obama’s Organizing for Action group during a national clean-energy drive, attracting criticism from some campaign-finance observers over the propriety of the president appearing to align with a private business. For his part, Matzzie briefly attained further progressive celebrity when he live-tweeted off-the-record conversations former National Security Director Michael Hayden held with reporters on an Acela train in 2013.
Most recently, Matzzie served as a booster of Washington Gov. Jay Inslee’s 2020 presidential campaign, and joined the board of Evergreen Action, the nonprofit that grew out of the failed White House bid.
“If we don’t solve climate change, we won’t be able to solve anything else—and civilization as we know it won’t be around much longer anyway,” the entrepreneur warned in his endorsement of Inslee.
But experts warned that CleanChoice’s conduct threatens to undermine the very cause Matzzie purports to champion.
“When CleanChoice says get ‘100 percent renewable energy,’ people think they can use as much as they want, and it won’t matter because it’s all green, it’s all renewable,” complained Cohen, who provided testimony in support of the case against CleanChoice in Illinois. “The customer feels that they can simply use as much as they want whenever they want, and it will never increase.”
This problem goes to the heart of CleanChoice’s business model. It does not, in fact, plug its subscribers’ homes into a wind farm or a solar array. Customers remain attached to the exact same system as before, drawing electricity from whatever sources the traditional utility company that owns the grid is tapping into at that time.
Although the firm runs some solar operations of its own, its main business is acquiring and reselling renewable energy credits, or RECs—certificates regulators give clean electricity producers for every megawatt-hour of juice they produce. This was contrary to how some of the consumers The Daily Beast interviewed understood the service they were paying CleanChoice for. Rather than just purchasing credits while getting the same power mix as their neighbors, they believed their home was somehow receiving electricity channeled from separate, zero-emissions sources.
The company asserted it makes the real arrangement clear in both its outreach and onboarding materials. It also characterizes its purchase of these credits from green generators as “replenishing the grid” with carbon-free power.
But Cohen argued these certificates are often for energy produced well in the past—and do little to help finance new alternative-energy projects that could replace existing fossil-fuel plants.
“When a customer buys energy from a green marketer, they believe they are buying new wind and solar, that they are contributing to new development of wind and solar,” he said.
Worse even, in some cases, customers may wind up paying for RECs from well outside their state, in places where energy standards are weaker and/or where electricity is more abundant—places with no connection to the grid the consumer actually draws from.
Such is the concern of Larry Chretien, executive director of the New England-based Green Energy Consumers Alliance.
“If you’re buying a Renewable Energy Certificate from a supplier, it should be doing enough to create more demand for renewable energy where you purchased it,” he told The Daily Beast. “The consumer is trying to make a difference. They want to see those projects happening, and they want to believe the dollar they are spending is helping make those happen.”
In its statement, CleanChoice maintained that 91 percent of the RECs it markets in Illinois derive from wind and solar power generated in-state. The situation is trickier, the company admitted, in states like Massachusetts, where supply is short and demand is high. Nonetheless, it asserted many of the out-of-state credits sold there are from New York, which has a couple connecting transmission lines to its eastern neighbor.
The company conceded that in 2020—the most recent year for which it had a full accounting—it sold RECs in Massachusetts from as far away as North Carolina and Illinois, in New Jersey from as distant as Iowa, in Washington, D.C. from as remote as Ohio, and in New York from as removed as Indiana, Michigan, and Kentucky. The firm asserted these broadly scattered purchases were simply a way of “covering contingencies” in tight REC markets—and claimed it disclosed all this information to customers.
Asked to provide a list of facilities from which it purchased RECs, CleanChoice characterized this as “confidential and proprietary business information.” It did, however, insist it does not buy RECs from low-regulation Texas, a notorious and much-criticized practice in the industry.
As CleanChoice noted, the Green Energy Consumers Alliance itself markets RECs. But Chretien said his nonprofit organization only seeks and sells credits financing local projects and creating local demand—and mainly on the scale of entire communities, leveraging the purchasing power of thousands and even tens of thousands of households at a time. He further argued that, given the high cost of advertising to individual consumers and of securing RECs in high-demand, high-regulation jurisdictions, no enterprise could succeed at being both lucrative and impactful.
“It is very hard to make a viable business acquiring one customer at a time,” he said. “I really do not think a for-profit company can exist [and] make a good profit, while producing the results that consumers really want.”
CleanChoice insists it has perfected just such a formula. But Berends, the customer from New Jersey, disagrees.
“It’s almost like, ‘Oh, what is this guy willing to pay?’” he said of the company’s apparent billing strategy. “That’s, from my perspective, no way to run the business. If you’re trying to promote green energy, you don’t want to be doing this kind of thing. You want to be straightforward.”