State Gives Default Service Customers Choice of Time of Use Options; Default Rate for Non-Shopping Customers Will Be TOU With Critical Peak Pricing, Once AMI Deployed

The Massachusetts DPU has issued a final order establishing a policy framework for time-varying basic service electric rates, which will provide non-shopping customers two pricing options.

The default basic service product will be a Time of Use rate with critical peak pricing, once AMI is deployed.

This rate will establish two TOU periods, on-peak and off-peak, with basic service rates for each period fixed for 6-month periods. However, for certain critical peak events, of which customers will be notified in advance, a much higher critical peak price will replace the otherwise applicable TOU rate.

Customers will have a second option for basic service which they must affirmatively elect: a flat rate with a peak time rebate. This is essentially identical to current basic service design, except that it includes the added value of a peak-time rebate, which rewards customers for usage reductions during called events, with no penalty for non-response.

Under the dynamic pricing framework, the DPU will address rate design considerations, low income protections, administrative changes, any necessary modifications to the basic service procurement process, and protocols for the treatment of customers who opt out of advanced metering technologies through future stakeholder processes.

Notably, in its order, the DPU said that, "nothing in this Order precludes [electric distribution] companies from proposing load control mechanisms, smart thermostats and appliances, and other innovative technologies and programs in conjunction with the implementation of time varying rates as part of their grid modernization plans."

D.P.U. 14-04-C