Regulator Terminates Utility-Offered Green Supply Program As "Unsustainable", Customers Encouraged to Review Competitive Market

The Massachusetts DPU has ordered the termination of Nstar's Green supply program, citing its "unsustainable" design (Docket D.P.U. 13-80).

The Nstar Green program was notable in that it relied on specific wind PPAs to supply customers at unique rates, rather than relying on REC purchases based on customer demand.

Since May 2011, the magnitude of the deferral balance resulting from the PPAs increased significantly due to: (1) declining enrollment in the Nstar Green program; (2) increased energy output from the Nstar Green contracts; and (3) declining wholesale electricity prices.

The resulting increased costs which must be recovered over a declining customer base would only lead to further migration away from the Green product, making the design "unsustainable," the DPU found.

Nstar shall terminate the Green program effective July 1, 2015.

Nstar shall provide written notice to all Nstar Green customers that the program will terminate effective July 1, 2015 and customers will be enrolled in traditional basic service unless they choose an alternate competitive supplier. Such termination notices must be designed to inform Nstar Green customers about the pending termination of the program and about opportunities to access renewable energy products through the competitive market, the DPU ordered.

Regarding the existing Green PPAs, the DPU ordered that Nstar shall sell such energy into the wholesale electricity spot market and apply the net proceeds from the sale as a credit or debit to basic service customers

The DPU also approved Nstar's proposal to use the RECs procured through the Green contracts to satisfy Nstar's basic service RPS requirements. Nstar shall reconcile costs associated with the energy and RECs purchases through the Nstar Green contracts to basic service customers through the basic service costs adder.

Under-recovery of "excess wind" costs (output from the PPAs that was not used by Green subscribers during the time the Green program was in effect) shall also be collected through the company's basic service costs adder. Nstar reported that the excess wind under-recovery is $4.561 million

Separately, in Docket D.P.U. 08-52, the DPU approved Nstar's proposal to provide "retail access" to competitive suppliers of RECs, including access to customer information, bill inserts, and the use of the utility bill for billing. REC suppliers will be responsible for costs to modify the Nstar billing system to accommodate non-LSE REC suppliers, as well as the costs of bill inserts.