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Overview
It is useful to think of the electric industry as being comprised of 3 components:
(1) generation, creating the electricity; (2) transmission, the wires and associated facilities that transport the electricity (at high voltage levels) from power plants to distribution substations; and (3) distribution, the wires and associated facilities that transport the electricity (at lower voltage levels) from distribution substations to customers' facilities and homes. In the electric industry as it existed before restructuring, these components were bundled and provided as monopoly services by electric companies, at prices fully regulated by the Massachusetts Department of Telecommunications and Energy (MDTE).
As of March 1, 1998, the generation component is unbundled from the other components of electric service. Customers are now able to purchase generation services from entities other than their traditional electric companies. The prices that these "competitive suppliers" of generation service may charge customers will be determined by the competitive market; these prices will not be regulated by the MDTE, although the suppliers will be licensed by the MDTE.
The other components of electric service (transmission and distribution) have not been opened to competition; instead, these components will continue to be provided as monopoly services by the electric companies. With regard to metering, billing, and information services, the Legislature has directed the MDTE to investigate whether these services should be unbundled and provided through a competitive market.
Unitil’s Electric Restructuring Compliance
Since Massachusetts restructuring was enacted in 1998, Unitil customers have seen a 15% rate reduction and have the freedom to choose their electric energy supplier.
Unitil has completed its electric power supply restructuring efforts, with the MDTE’s approval of Unitil’s agreement to sell the output from its remaining electric power generation portfolio to Select Energy, a subsidiary of Northeast Utilities.
Key steps Unitil has taken to implement restructuring have included:
- A 15% rate reduction – 10% in March 1998 and an additional 5% in September 1999.
- Divestiture of power supply contracts and assets.
- Opening the service territory to competitive energy suppliers.
- Providing standard offer service for seven years, allowing customers time to choose another energy supplier, and default service for customers whose energy supplier is unable to provide service.
- Expanding programs for energy efficiency and the protection of low-income customers.
For more information on electric restructuring, click on: