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AG Can't Charge Retail Suppliers $150,000 For Costs of Regulatory Advocacy, Regulator Rules

August 18, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Massachusetts DPU has denied a request from the state's attorney general to assess retail suppliers the costs of retaining expert assistance in the DPU's investigation of the retail market, finding that the DPU lacks authority to require retail suppliers to pay such AG costs.

The AG had sought to recovery from retail electric suppliers $150,000 related to the retention of experts and consultants used to prepare its positions in the DPU's retail market investigation. Citing statute which allows for the AG to recover the costs of such experts in proceedings involving the rates, charges, prices, or tariffs of an electric or gas company, the AG sought to assess the costs on retail suppliers.

The DPU noted that the relevant statute regarding the AG's recovery of expenses does not include the term competitive supplier. The DPU said that pertinent provisions of the statute (Section 11E(b)) that yield insight into the funding of the Attorney General’s expert and consultant costs include reference to: (1) "proceedings" before the Department; (2) the Attorney General’s representation of "ratepayer interests;" (3) the phrase "affected party;" and (4) the phrase "recovery through rates."

"Section 11E(a) does not include proceedings before the Department in connection with rates, charges, prices and tariffs of competitive suppliers (or suppliers)," the DPU noted.

"As for the term 'ratepayer' in Section 11E, a ratepayer is a customer of a public utility (e.g., a gas, electric, or water company). A ratepayer is not a customer of a competitive supplier. A competitive supplier is not a public utility," the DPU added

"As for the term 'affected party,' Section 11E(b) requires that reasonable and proper expert or consultant costs shall be born by the affected party. However, 'affected party' it is not defined in Section 11E. Considering the statute as whole, we consider an affected party to be an entity coupled with a proceeding identified in Section 11E(a) (i.e., an electric company, water company, gas company, generator, transmission company). Within the context of Section 11E, we cannot read the term affected party as including a competitive supplier," the DPU said.

"Finally, regarding the use of the term 'recovery through rates,' rates are prices charged to ratepayers for regulated utility service. A utility’s rates are subject to approval by the Department pursuant to filed tariffs. See G.L. c. 164, § 94. The Department does not regulate a competitive supplier’s prices. A competitive supplier’s prices are not subject to Department approval," the DPU said

"Based on this analysis and in applying the ordinary and approved usage to relevant terms in Section 11E, the Department finds that it does not have authority under Section 11E to approve the recovery of costs from competitive suppliers for the Attorney General’s retention of experts and consultants. Accordingly, the Attorney General’s request is denied," the DPU said

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