Investigations of changes in the structure of the electric utility industry are growing at the state level. Restructuring issues are also becoming a larger part of traditional rate cases and other established regulatory functions such as integrated resource planning.
Several matters related to competition, industry restructuring, and regulatory reform were cited by the Massachusetts Department of Public Utilities (DPU) when it approved a $30.95-million rate increase for Massachusetts Electric Co., an investor-owned utility and wholly-owned subsidiary of New England Electric System.
The DPU rejected an attempt by the utility to recover lost revenues associated with the decision of one of its largest customers, Massachusetts Bay Transportation Authority (MBTA), to switch to a neighboring utility for part of its supply requirements. According to the DPU, the utility had failed to show that losing part of its 13 MBTA accounts was an extraordinary event beyond the "normal ebb and flow" of customers experienced by all utility companies. The DPU also rejected a proposal to alter the way the company allocates its cost of electric supplies to account for "excess power-supply costs" associated with lost or unrealized sales to industrial customers. Proponents of the cost shift had claimed that the new allocation method would better reflect a documented increased risk of faulty forecasting for industrial sales.