On February 20, 1998, the Massachusetts Department of Telecommunications and Energy ("Department") issued its " Rules Governing the Restructuring of the Electric Industry," 220 C.M.R. 11.00  et seq. The issuance of these rules culminated a three-year process during which the Department, along with the Legislature, other state agencies (most notably, the Attorney General and the Division of Energy Resources), and key industry participants, developed the guidelines that would govern the restructured industry. Key dates and events leading to the issuance of the Department's rules are listed below.

February 10, 1995 - The Department issued its "Notice of Inquiry and Order Seeking Comments on Electric Industry Restructuring" ("NOI"), docketed as D.P.U. 95-30. The purpose of the NOI was to "investigate and determine (1) how a restructuring of the electric industry in Massachusetts would promote competition and economic efficiency and expand opportunities that would benefit consumers, (2) whether and how to extend to some or all customers the option of choosing their own electricity supplier, (3) how such a restructuring could be implemented, and (4) the appropriate regulatory mechanisms to apply to a restructured electric industry." In the NOI, the Department invited all interested parties to file comments on electric industry restructuring issues in general and in response to questions attached to the document.

August 15, 1995 - The Department issued its Order in D.P.U. 95-30  in response to comments received pursuant to the NOI. In this Order, the Department listed seven principles that would "establish the essential underpinnings of an electric industry structure and regulatory framework designed to minimize long-term costs to customers while maintaining safe and reliable electric service with minimum impact on the environment." These principles follow:

  1. Provide the broadest possible customer choice.
  2. Provide all customers with an opportunity to share in the benefits of increased competition.
  3. Ensure full and fair competition in generation markets.
  4. Functionally separate generation, transmission, and distribution service.
  5. Provide universal service.
  6. Support and further the goals of environmental regulation.
  7. Rely on incentive regulation where a fully competitive market cannot exist, or does not yet exist.

In addition, the Department presented five principles that would guide the transition to a restructured electric industry:

  1. Honor existing commitments.
  2. Unbundle rates.
  3. Seek near-term rate relief.
  4. Maintain DSM programs.
  5. Ensure that the transition is orderly and expeditious, and minimizes customer confusion.

May 1, 1996 - The Department issued an Order in D.P.U. 96-100, which included an explanatory statement and proposed rules that were intended "to serve as reference points and to generate response and discussion" as the investigation into the restructuring industry proceeded. The Department solicited comments on the proposed rules and on the issues raised in the explanatory statement and announced that public hearings would be held on the proposed rules.

December 30, 1996 - The Department issued its " Electric Industry Restructuring Plan: Model Rules and Legislative Proposal" (D.P.U. 96-100). The Model Rules laid out the Department's "vision of a restructured electric industry that can deliver on the promise of lower costs and increased choices for consumers" and presented a "framework to ensure full and fair competition in generation, and redefine our regulatory approach in a market-based electric industry."

The Department recognized that the restructuring of the electric industry required the support of, among other parties, the Massachusetts Legislature. The Department stated that we would modify our Model Rules as necessary to comply with any restructuring plan that was adopted by the Legislature.

November 19, 1997 - The Massachusetts Legislature passed House No. 5117, "An Act Relative to Restructuring the Electric Utility Industry in the Commonwealth, Regulating the Provision of Electricity and Other Services, and Promoting Enhanced Consumer Protections Therein" (" Restructuring Act").

February 20, 1998 - The Department issued its final Order in D.P.U./D.T.E 96-100  and its " Rules Governing the Restructuring of the Electric Industry " (220 C.M.R. 11.00). These Rules maintain many of the provisions included in the Department's Model Rules, while complying with the directives included in the Restructuring Act. The Rules govern the restructured electric industry in Massachusetts. Their purpose is to provide a regulatory framework for an efficient industry structure that will minimize long-term costs to consumers while maintaining the safety and reliability of electric services with minimum impact on the environment.

This information is provided by the Department of Public Utilities

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