|
Server : Apache/2.4.62 System : FreeBSD fbsdweb2.web.rcn.net 14.1-RELEASE FreeBSD 14.1-RELEASE releng/14.1-n267679-10e31f0946d8 GENERIC amd64 User : www ( 80) PHP Version : 8.3.8 Disable Function : NONE Directory : /domains/enrgy/statelin/ |
Upload File : |
<html>
<head>
<title>July 2002: Massachusetts Initiates Studies on Default Service and on
Distributed Generation</title>
</head>
<body style="font-family: Arial" vlink="#808080">
<div align="center"><center>
<table border="0" cellpadding="8" cellspacing="0" width="98%" bgcolor="#000000">
<tr>
<td width="100%" valign="middle"><a name="top"></a>
<img src="../images/pmamagsm.gif" alt="PMA Online Magazine" border="0" align="right" width="229" height="100"></td>
</tr>
</table>
</center></div><div align="left">
<table border="0" cellpadding="8" width="100%" style="border-collapse: collapse" bordercolor="#111111" cellspacing="0">
<tr>
<td width="15%" valign="top" align="center">
<!--webbot bot="Include" U-Include="sl_sidebar.htm" TAG="BODY" startspan -->
<table border="2" cellpadding="8" width="15%" id="table1" bordercolor="#FFFF00" bgcolor="#C0C0C0">
<tr>
<td width="100%" valign="top" align="center"><map name="FPMap0_I1">
<area href="http://www.powermarketers.com/adrates.html" shape="rect" coords="14, 297, 97, 322">
<area href="http://www.powermarketers.com/pmajobs.htm" shape="rect" coords="11, 230, 95, 257">
<area href="http://www.powermarketers.com/main.htm" target="_parent" shape="rect" coords="12, 163, 96, 189">
<area href="http://www.powermarketers.com/power2.htm" target="_blank" shape="rect" coords="12, 95, 96, 121">
<area href="../pmamag.htm" shape="rect" coords="11, 29, 96, 54"></map><img rectangle="(12,163) (96,189) http://www.powermarketers.com/main.htm##_parent" rectangle="(12,95) (96,121) http://www.powermarketers.com/power2.htm##_blank" rectangle="(11,29) (96,54) ../pmamag.htm" src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" usemap="#FPMap0_I1" width="110" height="350"><p><a href="../searchpma.htm"><img src="../images/archives.gif" alt="Archives Search" border="0" align="center" WIDTH="70" HEIGHT="40"></a></p>
<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p><a href="#top"><img src="../images/b-t-top.gif" alt="Back To Top" border="0" width="71" height="35"></a></td>
</tr>
</table>
<!--webbot bot="Include" i-checksum="45188" endspan --></td>
<td width="71%" valign="top">
<img src="../images/statelin.gif" alt="STATELINE by Robert Olson" border="0" width="375" height="75">
</center><p align="left"><b><u><br>
July 2002</u>
<br>
</b><font SIZE="6" COLOR="#000000">
Massachusetts Initiates
Studies on Default </font><font SIZE="6">Service <br>
and on Distributed Generation<br>
</font><strong>by Robert Olson -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
200</em>2/11/26)</font></p>
<center>
</p>
<font SIZE="3">
</font>
<center>
<center>
<p ALIGN="JUSTIFY">The Massachusetts Department of Telecommunications and
Energy (the "Department") has ordered two new studies. The first study,
initiated by order dated June 21, 2002, Docket No. D.T.E. 02-40, will
investigate all aspects of the provision of default service to ensure its
compatibility with a competitive market, and the second study, initiated by
order dated June 13, 2002, Docket No. D.T.E. 02-38, will identify technical,
economic and regulatory barriers to distributed generation.</p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">With respect to the default service study, standard offer
service is scheduled to end in Massachusetts in February of 2005, leaving
default service as the generation service of last resort and substantially
increasing the role of default service in the electric industry. Default
service is intended to provide basic service, but also to incentivize
customers to switch to the competitive market. Current customer migration
data indicates, however, that an active competitive market has yet to
develop among residential and small commercial and industrial ("C&I")
customers. Against this backdrop, the Department seeks to identify any
aspects of default service that may hinder the development of a competitive
market. </p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">The defined scope of the study is broad and will take
into account a range of possible assumptions. On one extreme, the study will
assume that distribution companies remain the providers of last resort, and
that market forces alone will cause customers to migrate to competitive
supply. On the other extreme, the study will assume that the development of
a strong competitive market requires that default service be obtained in the
competitive marketplace, and that distribution companies will therefore not
continue as providers of last resort. </p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">The study will specifically examine existing policies
regarding 1) price components for default service rates, 2) default service
pricing options and 3) procurement strategies. In particular, the default
service rates currently exclude administrative, bad debt and marketing
costs. Also, there are currently two available pricing options—a variable
price that changes monthly based on the prices the distribution companies
pay to their default service suppliers, and a six month fixed price based on
the average monthly price. Finally, the Department currently requires
distribution companies to procure default service supply competitively for
periods ranging from between six months to one year, and with prices bid
separately for residential, commercial and industrial customers.</p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">The Department anticipates that the study may indicate a
need for initiatives that exceed its statutory authority, and stands ready
to develop a report from which the legislature could consider statutory
changes.</p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">Regarding the distributed generation study, the
Massachusetts Restructuring Act (General Laws c. 164 � 1) defines
distributed generation as "a generation facility or renewable energy
facility connected directly to distribution facilities or to retail customer
facilities which alleviate or avoid transmission or distribution constraints
or the installation of new facilities or distribution facilities." The
Department acknowledges the importance of distributed generation in reducing
peak load and thereby relieving transmission and distribution constraints
and preventing outages, and is concerned that there may be "technical,
economic, and regulatory barriers to distributed generation." The study will
identify and consider how to address any such barriers.</p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="justify">For example, technical interconnection standards
currently vary among distribution companies, some of which standards may
unduly inhibit installation of distributed generation. The study will
consider whether Massachusetts should adopt uniform interconnection
standards and, if so, whether to adopt any of the uniform standards now in
effect in several other states or the uniform standards under development by
the Institute of Electrical and Electronic Engineers. </p>
<center>
<center>
<center>
<font FACE="Palatino" SIZE="2">
<p ALIGN="justify"></p>
</font>
<center>
<center>
<center>
<p ALIGN="justify">In addition, customers with on-site generation generally
rely on the distribution company to provide standby or back-up power, and
standby or back-up rates that are too high may discourage installation of
distributed generation, but rates that are too low shift costs to other
customers. The study will investigate the appropriate method for determining
such rates.</p>
<center>
<center>
<center>
<font FACE="Palatino" SIZE="2">
<p ALIGN="justify"></p>
</font>
<center>
<center>
<center>
<p ALIGN="justify">Finally, recognizing that distributed generation potentially
allows utilities to defer or postpone upgrades and additions to their
transmission and distribution systems, the study will consider the role of
distribution companies in identifying areas where distributed generation
would be a lower cost alternative to such upgrades or additions, and in
otherwise encouraging distributed generation in their service areas.</p>
<center>
<center>
<center>
<font FACE="Palatino" SIZE="2">
<p ALIGN="justify"></p>
</font>
<center>
<center>
<center>
<p align="justify">The orders initiating the default service study and the
distributed generation study were both issued in June and both request
initial public comments by August 1, 2002. </p>
<!--webbot bot="Include" u-include="sl_bottom.htm" tag="BODY" startspan -->
<hr color="#FFFF00">
<blockquote>
<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
<!--webbot bot="Include" i-checksum="27861" endspan --></td>
</tr>
</table>
</div>
<p align="center"><a href="#top">
<img src="../images/b-t-top.gif" alt="Back To Top" border="0" width="71" height="35"></a></p>
</body>
</html>