Massachusetts Issues Proposed Rules for Retail Electricity Rate Board, Website

The Massachusetts DPU has issued proposed rules for a DPU retail electricity rate board and shopping website.

Under the proposed rules, listing supply offers on the website would be voluntary.

The proposal provides that, "initially," only fixed-price products will be listed on the website. Products with pricing structures other than fixed-price (e.g., monthly variable-price and indexed variable–price) may be listed on the website in the future, the proposal states.

To qualify as a fixed-priced product, the proposal provides that:

1. the specified price for the product must remain unchanged for at least three billing cycles (not including introductory price offers); and

2. the terms and conditions for the product must not allow changes in the specified price (e.g., pass-through of costs that may arise from changes in regulation) during the term of the contract

The proposed rules provide that, for each product, the supplier must identify the distribution company's service territory (or territories) in which, and the customer class (or classes) to which, the product is available. The supplier must offer the product to all customers within the identified service territory (or territories) and customer class (or classes).

It was not clear whether the term distribution company will be defined as the legacy legal distribution companies (e.g. Boston Edison, Commonwealth Electric), or the umbrella utility brand (e.g. Nstar). An example of the website lists Mass. Electric and Nantucket Electric separately rather than National Grid, but lists only Nstar and not its three former distribution companies. While residential basic service rates typically do not vary by legal distribution companies (e.g. Boston Edison and ComElectric rates are identical), we have seen, in some rare instances, retail suppliers providing different residential offers to Nstar customers depending on whether they are in the Boston Edison or ComElectric territory, presumably due to the different grid topology of each.

For products with an automatic renewal provision, the proposal provides that suppliers must identify (1) the pricing structure that will be in effect during the term of the automatic renewal, and (2) the term (in months) during which the new pricing structure will be in effect

The proposed rate board will provide an opportunity for suppliers to separately list other energy-related products and services, and non-energy characteristics

Initially, the types of other energy-related products and services that can be listed on the website are proposed to be: (1) smart thermostats; (2) photo-voltaic solar installation; (3) heating, ventilation, and air conditioning services; (4) home warranty protection; and (5) energy efficiency services. This list may be revised in the future.

Initially, the types of non-energy characteristics that can be listed on the website are proposed to be: (1) reward points; (2) gift cards; and (3) charitable contributions. This list may be revised in the future.

Customers will be able to sort, filter and compare products. The default listing on the rate board is proposed to list products as follows:

1. Products whose prices are expressed only in cents per kWh will be listed first, followed by products whose prices are expressed in both cents per kWh and dollars per month.

2. (1) Products whose prices are expressed only in cents per kWh will be listed from lowest to highest price; and (2) products whose prices are expressed in both cents per kWh and dollars per month will be listed from lowest to highest dollars per month. Products with identical dollars per month will be listed from lowest to highest cents per kWh.

3. Products with identical cents per kWh prices (and dollars per month, if applicable) will be listed from longest to shortest contract term.

4. Products with identical prices and contract terms will be listed from lowest to highest early termination fee (e.g., product with no early termination fee would be listed first).

5. Products with identical pricing, contract term, and early termination fee will be listed from highest to lowest renewable content.

6. Products with identical pricing, contract term, early termination fees, and renewable content will be listed alphabetically by name of Supplier.

The proposed website will calculate, for each product selected by the customer for specific comparisons on a "products to compare" page, the average expected monthly cost over the length of the product's contract term. In addition to calculating costs related to the specific product (i.e., costs for the supply component of the monthly electric bill), the calculator will calculate the average expected monthly cost for (1) the delivery component of the bill, and (2) the total bill (i.e., the sum of the supply and delivery service components). For the purposes of calculating these costs, website users will have the option of using an average monthly usage value (in kWh), or specifying a monthly usage value.

The website will also list basic service rates. The contract term for basic service will be shown as the month through which the listed rates are effective, and, when applicable, two basic service rates will be listed -- the rate currently in effect and the subsequent rate approved by the Department

The website will list only the fixed basic service rates.

The DPU proposes that the website will periodically produce a "user preference" report that will track, on an aggregated basis, the types of product preferences users demonstrate through their selections on the website.

D.P.U. 14-140