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Regulator Intends To Open Review Of Default Service Procurements
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Responding to a request from the Massachusetts Attorney General, the Massachusetts DPU said that, "In regards to examining rules governing future procurement of basic service, the
Department intends to open such an investigation after the resolution of the short-term
procurement proposals pending before the Department."
The "short-term
procurement proposals" referenced by the DPU consist of various proposals recently made by Nstar, National Grid, and Unitil (the former two EDCs due to failure to procure large industrial load in recent RFPs, and Unitil due to ongoing municipal aggregation issues)
The DPU said of the forthcoming review, "Through this investigation, the
Department intends to examine procurement strategies, including layering of procurements and
timing, in order to solicit and obtain competitive bids that provide fair, market-based electric
rates to basic service customers. During the investigation, the Department will also consider
secondary procurement approaches in order to avoid the necessity of multiple administrative
proceedings in the event a primary procurement does not yield successful bids."
The DPU stamp-approved the recently reported National Grid basic service rates, which are in excess of 30 cents per kWh for residential and commercial customers, for the fixed rate option for the upcoming winter term
The DPU noted that such rates resulted from established statute and rules concerning procurements, in declining to withhold approval pending further consideration as requested by the AG
The DPU said, "The Department and the Attorney General have discussed mitigating the impact of high
energy costs over the last several months, including during a meeting with stakeholders last
week, as noted in your letter. The Department hopes to continue this productive dialogue with
the Attorney General, the electric distribution companies, and stakeholders to develop
meaningful, equitable, and timely means to assist customers."
The DPU noted various actions it has taken to alert customers of the rate or to mitigate overall bill costs (citing a distribution rate mitigation and its prior direction for new energy efficiency programs)
In doing so the DPU further noted, "Customers may also seek to obtain alternative electric
supply through the competitive supply market; however, the Department strongly urges
customers to exercise caution. Customers should be mindful of the rate, the term of the rate,
potential termination costs, and any automatic re-enrollment conditions."
On the same day (Sept. 27) as the DPU made its pronouncements above and stamped-approved the rates, the Attorney General filed a letter raising a new concern with the recent National Grid procurement
The substance of the AG's new concern was redacted in a public filing. However, the AG makes reference to National Grid's statement that, in evaluating bids, "lowest final bids for each load block were compared to National
Grid's estimate of expected bids based on the methodology described [for indicative bids]," and that the EDC, "compared the
expected bid price for each block from the method above to the lowest average ... bid price for the block." As noted, further details of the AG's concern were filed under seal
The AG said, "The above-described issue [which was redacted] with the Company's filing only further reflects the need for
the Department to open an investigation to wholistically [sic] investigate the basic service
procurement process to better protect consumers from high rates and rate shock in the future."
Docket 22-BSF-d3
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AG Raises New, Additional Concern With Bids As 30¢ Rates Approved
Regulator "Strongly Urges ... Caution" Against Shopping For Retail Supply
September 27, 2022
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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