1 / 10

Massachusetts Electric Restructuring Roundtable

Best Practice Design for Competitive Electric Retail Markets. Massachusetts Electric Restructuring Roundtable. June 21, 2002. Building on the 1997 Landmark MA Law.

kat
Download Presentation

Massachusetts Electric Restructuring Roundtable

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Best Practice Design for Competitive Electric Retail Markets Massachusetts Electric Restructuring Roundtable June 21, 2002

  2. Building on the 1997 Landmark MA Law • 1997 legislative initiative uncoupled generation from the integrated utility company – instrumental in saving Massachusetts customers over $2 billion. • This proposal suggests that the logical next step would uncouple the delivery lines portion of the utility business from the retailing business. • Best practice research indicates that this unbundling is essential to establishing viable retail competition in former monopoly markets. • With the end of regulated pricing near, the time is now appropriate to complete the unbundling of regulated and monopoly functions. 2

  3. Co. A Co. B Co. C Revised Market Structure Competitive Generation Customers Competitive Customer Service (retail service providers) Regulated Transmission & Distribution 4

  4. Reliable Delivery Service Transmission and Distribution business should be focused on reliabledeliveryservice. Key Responsibilities: • Design, build, maintain electric infrastructure • Repair poles and wires after customer outages • Provide accurate metering consumption data to retail provider • Register customers’ choice of retail provider What Could Be Different: • “Utility” exits competitive businesses • Primary focus on reliable service to customers and retail provider • Avoids many code-of-conduct and cross-subsidy issues • Avoids business uncertainty of regulated prices competing in the marketplace • Utility bills retail provider for T&D service at regulated rates 5

  5. Retail Service Providers will focus on customer needs and product and service innovation • Retail companies need the option to bill the customer, operate phone centers, handle customer inquiries. • Retail companies will develop the relationship with the customer so as to offer more products and services and understand customer needs. • Unbundling envisions that utilities would create their own affiliated RSP that provides SOS service … at a minimum 6

  6. Default Service customers to be transitioned to competitive RSP in January 2004 • DTE to select RSP based on bids received for service price through February 2005 • RSPs that win bidding continue service to those customers at market based prices beginning March 2005 • If a customer prefers not to receive service from the chosen RSP, the customer will be free to choose another RSP 7

  7. Consumer Protections are critical to a competitive marketplace • Extension of existing consumer protections • Re-tooled retail marketplace will attract more competitors, bringing the competition and better service originally envisioned • Low-income discounts “passed through” to ensure all RSPs can offer same discounts • SOLR service to ensure customers will have power in the event an RSP fails to provide service 8

  8. Supplier of Last Resort service provided competitively by RSPs • SOLR service to ensure customers will have power in the event an RSP fails to provide service • RSPs bid to provide SOLR service with direct customer contact like other RSPs • If no RSPs bid for to provide the service, the DTE can select an RSP and negotiate the terms of the service 9

  9. Timeline of Proposal Implementation Steps March 2005 January 2004 SOS ends, customers; move to competitive pricing October 2003 Unbundling implemented, SOS transferred to affiliate RSPs Default customers served by RSPs SOLR service begins March 2003 DTE selects RSPs to serve Default Customers DTE selects SOLR RSPs March 2003 DTE sets rules to select RSP for Default Customers DTE sets rules for SOLR service DisCos file unbundling plan with DTE 10

  10. Review • This proposal focuses each type of company on its core competency. • Distribution companies’ primary purpose will be to ensure reliability and integrity of delivery system. • Retail companies operating under this proposal must exceed customer expectations to succeed. • Choice will bring viable options for residential and small business customers. Retail companies will competitively strive to offer new services. • Customers will continue to receive one bill from their current provider or a newly selected RSP. 11

More Related