Mass. OK's Stranded-cost Charge for Self-generators

Fortnightly Magazine - December 1995
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The Massachusetts Department of Public Utilities (DPU) has ruled that Cambridge Electric Co. may recover stranded costs from customers that switch to self-generation. The DPU made the ruling while reviewing a "Customer Transition Charge" (CTC) filed as part of the utility's tariff for services in connection with the operation of a cogeneration qualifying facility (QF) by one of its large customers, the Massachusetts Institute of Technology (MIT). Cambridge said the charge was not an exit fee, but a charge based on the customer's specified maximum standby contract demand (em "essentially a wires charge."

The DPU concluded that a CTC charge of 75 percent of net stranded cost represented the proper balance of interests between the "load at risk class," the utility, and other ratepayers. The new rate of $5.62 per kilovolt-ampere (kVa) would apply to any customer that discontinues all or a portion of all-requirements firm sales service and 1) has an average billing demand of 2,000 kVa or greater for the most recent calendar year, 2) obtains electric service from another source, and 3) remains within Cambridge's service area.

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