Massachusetts DPU Eliminates Basic Service Bill Recalculation For Mass Market Customers

The Massachusetts DPU yesterday issued an order eliminating the electric basic service bill recalculation for residential and small C&I customers, effective immediately

The basic service bill recalculation retroactively applies monthly basic service rates to the customer's prior usage (instead of the fixed rate the customer had been paying). This can result in a charge or credit to the customer based on basic service pricing.

The basic service bill recalculation remains in place for large C&I customers.

The DPU directed the utilities to implement a tracking mechanism to provide empirical data on two factors: (1) the amount of money that each electric distribution company must collect or credit through its basic service reconciliation factor due to the elimination of the bill recalculation provision; and (2) the extent to which individual competitive suppliers are gaming the system by switching their customers (both to and from basic service) on a seasonal basis.

Such data will allow the Department to determine if further action is necessary regarding the basic service bill recalculation and/or other measures to prevent customers from gaming the system by strategically departing and returning to basic service.

The elimination of the basic service bill recalculation will apply to all residential and small C&I customers, both those switching on their own volition, and those included in opt-out municipal aggregations.

However, the DPU noted that Unitil had recommended that the Department limit the start of municipal aggregation plans to coincide with the timing of the applicable distribution company’s basic service rate term for its residential and small C&I customers, given the potential impacts on cost recovery if the basic service bill recalculation is eliminated.

The DPU observed that the issue of treating municipal aggregation customers differently with respect to the basic service bill recalculation was not identified in its original notice regarding its investigation, and will not treat municipal aggregation customers differently than other residential and small C&I customers at this time.

However, the Department, "determines it is appropriate to investigate bill recalculation in the context of municipal aggregations, and will issue a separate request for comments on whether the Department should continue bill recalculation for customers of a municipal aggregation."

The DPU also rejected, at this time, a proposal from the Cape Light Compact that would require residential and small C&I customers that switch back to basic service (from competitive supply) during the middle of a basic service pricing period to be placed on the variable monthly rate for the remainder of the pricing period. The DPU said it would consider such a proposal in the future if evidence suggests competitive suppliers may be gaming the system by switching customers back to basic service during a pricing term