MASSACHUSETTS ELECTRIC RESTRUCTURING ROUNDTABLE Future of Retail Competition

MASSACHUSETTS ELECTRIC RESTRUCTURING ROUNDTABLE Future of Retail Competition in Massachusetts January 18, 2002 Paul Vasington Commissioner, Mass. DTE 1

Topics • Past performance is no guarantee of future results • What has the DTE done recently to promote retail competition? • What’s coming next? 2

1997 RESTRUCTURING ACT • Distribution companies provide two types of generation service: Standard Offer and Default • Standard Offer Service: – Provided to distribution company customers of record as of March 1, 1998, who choose not to purchase electricity from a nonaffiliated generation company. – Offered for a transition period of seven years (3/1998 -2/2005) – Prices and terms approved by the DTE after a competitive bid process that is reviewed and approved by the DTE – Prices for Standard Offer Service were subject to a 10% rate reduction on March 1, 1998, and an additional 5% inflationadjusted rate reduction on September 1, 1999 3

1997 RESTRUCTURING ACT • Default Service: – Provided to new customers (i. e. , began service after March 1, 1998), customers who switch back from a competitive supplier, and all customers not using a competitive supplier after Standard Offer Service ends (2005). – Default service supply must be procured through competitive bidding; provided, however, that the default service rate shall not exceed the average monthly market price of electricity; and provided, further, that there shall be payment options with rates that remain uniform for periods of up to six months. – Default service rates have been and are tied to Standard Offer Service rates, until the DTE implements the pricing and procurement provisions of DTE 99 -60. 4

2002 Standard Offer Prices Boston Edison Co. Jan. - Mar. 6. 376 Apr. - Dec. 4. 95 Cambridge Electric Light Co. Jan. - Mar. 5. 626 Apr. - Dec 4. 2 Commonwealth Electric Co. Jan. - Mar. 5. 626 Apr. - Dec 4. 2 Fitchburg Gas and Electric Co. Massachusetts Electric Co. Western Massachusetts Electric 5. 626 Jan. - June 5. 626 July - Dec. 4. 2 4. 841 5

2002 Default Service Fixed Prices Co. Time Period Res. Com. Ind. BECo Jan. to June 6. 393 6. 574 6. 549 July to Dec. 5. 638 5. 671 5. 922 Jan. to June 6. 06 6. 232 6. 175 July to Dec. 5. 351 5. 38 5. 613 Jan. to June 6. 289 6. 468 6. 41 July to Dec. 5. 52 5. 552 5. 792 FG&E Jan. to May 4. 996 5. 005/4. 808 4. 679 MECo Jan. to April 6. 917 7. 045 7. 787 WMECo Jan. to June 7. 57 7. 63 Cambridge Comm. 6

Competitive Market Initiatives - DTE 01 -54, June 29, 2001 - “The primary objective of the investigation is to identify and implement initiatives that would expand the range of competitive options available to consumers. ” 7

DTE 01 -54 (cont. ) - DTE directed distribution companies to provide the names, addresses, and rate classification of its default service customers to licensed competitive suppliers and electricity brokers, upon request. - Supplier is required to agree that the information will be used only for the marketing of electricity-related services. - Distribution companies also are required to compile a list of suppliers that are ready to provide competitive generation offers to customers in its service territory. 8

DTE 01 -54 (cont. ) - DTE 01 -54 -A, October 19, 2001 - Customer Information List. - Name, addresses, and rate class. - Historic usage data, unless a customer “opts out. ” - No info or “Filtering” related to customers’ payment or credit histories and no account numbers. - Include customers’ service and mailing addresses, as well as contact persons, where available. Include meter read cycle. 9

DTE 01 -54 -A (cont. ) - Customer Information Lists - Include both standard offer and default customers. - Formatted consistently among distribution companies and available in electronic form, updated quarterly. - List must be used for electricity-related services, including both supply and demand related activities. - List is available at no cost. 10

DTE 01 -54 -A (cont. ) - Convene a customer information working group to develop a detailed implementation plan. - “Opt out” process - customer education - First meeting on October 24, 2001. 3 additional meetings have been held. 11

DTE 01 -54, Next Steps - Phase II - Appropriate role of the distribution company as an electricity broker (i. e. , Internet-based auction or direct authorization). - Specific applications of electronic signatures as Internet-based authorizations for changing suppliers. - Next Phases - Distributed generation (interconnection standards and back-up rates) - Allocation of costs for default service 12

DTE 01 -28 - Metering and Billing Services docket - Tariffs for advanced meters were approved for July 1, 2001. Further investigation on broader availability is in progress. - Partial payments are allocated in direct proportion to distribution company and supplier current charges and arrears – no preference for distribution charges. 13

References: WWW. STATE. MA. US/DPU paul. vasington@state. ma. us 14