Massachusetts restructuring plan receives regulatory green light

Issue 5 and Volume 101.

Massachusetts restructuring plan receives regulatory green light

Massachusetts Electric Co., the state?s largest retail electric company, has received approval from the Massachusetts Department of Public Utilities (DPU) for its restructuring plan. The plan would allow customers to choose their electricity supplier beginning Jan. 1, 1998. The plan, called Consumers First, is in the form of a settlement with Massachusetts Attorney General Scott Harshbarger, the Massachusetts Division of Energy Resources and 14 other parties. According to its order issued recently, the DPU found Consumers First Oa just and reasonable resolution of restructuring issues for the Company and its ratepayers, and thus … in the public interest.O Consumers First is the nation?s first negotiated settlement of its kind to receive state approval.

As part of the settlement agreement, Massachusetts Electric affiliate New England Power agreed to sell its electric generation business. Also, Massachusetts Electric will be allowed to continue to recover the costs of prior commitments through a 2.8 cents per-kilowatt-hour competitive transition charge. The charge, which is less than the current 3.4 cents, will decline over time. Consumers First requires that Massachusetts Electric continue to deliver to customers electricity and services, including billing, metering and repairs. However, consumers will purchase their energy supply from one of many competing companies.

For the first seven years of competition, consumers who do not choose a new supplier will have a guaranteed 10 percent savings off their total bill. Consumers who go to the market and choose a supplier may realize even more savings. Consumers First also has protections for low-income customers, for the environment, and for employees and communities affected by the generation sale. The Federal Energy Regulatory Commission (FERC) also must accept the plan, which was filed with the FERC on Dec. 3, 1996.