Ratemaking Straw Proposal Comments

The comments made the following points:

  • There is a clear and urgent need to plan, in preparation for the completed rollout of advanced metering infrastructure (AMI), for utility-specific time-of-use (TOU) rates that can be implemented as soon as possible to allow the affordability benefits of the AMI investment to flow to electric distribution company (EDC) customers, and the Proposal lays out a reasonable starting position.
  • DOER should provide or perform analysis specific to MA’s EDC territories, particularly regarding bill impacts to LMI customers, in the upcoming proceeding.
  • DOER should clarify the envisioned interaction of its TOU proposal with extant income-eligible discount rates.
  • Acadia Center recommends focus on customer protections and education in TOU rate implementation, including shadow billing for all customers and bill stabilization for LMI customers for a year.
  • It is unclear whether a fixed charge increase would be net beneficial or not, and Acadia Center reserves support until more specific analysis is provided.
  • Acadia Center strongly supports eliminating reconciliation mechanisms wherever legally possible and transitioning the relevant costs back into base rates. Acadia Center recommends, for any reconciliation mechanisms that cannot be legally eliminated, consideration of a sharing mechanism that expose EDC shareholders to the benefits and risks of under- or over-spending by sharing the benefits of good EDC management and the costs of bad EDC management with customers who have no alternative option.
  • Acadia Center expresses cautious openness to recoupling as a mechanism to incentivize electrification and increase competition between EDCs and LDCs for heating customers, while ensuring that core principles for incentivizing energy efficiency are preserved/not unduly watered down, particularly to the extent recoupling can serve as a replacement for an attrition relief mechanism in the EDCs’ multi-year rate plans. However, the potential for a split incentive issue around EE and DERs is significant, and, as such, Acadia Center recommends examining the potential advantages and drawbacks of a 3rd party EE program administrator, as well as additional analysis of the MA market and customer bills.
  • Rather than discontinuing stay-out provisions entirely, as the Proposal prefers, Acadia Center recommends consideration of optional stay-out provisions linked to performance incentive mechanisms (PIMs) such that only an EDC participating in a multi-year rate plan with a stay-out provision can receive rewards attached to PIMs.
  • Acadia Center supports consideration of additional PIMs beyond those in the Proposal, including but not limited to: A grid efficiency PIM (measuring relative % utilization on- and off-peak, ideally targeted as granularly as possible) and a peak load reduction PIM (setting a baseline peak load then providing a reward for decreasing it or penalty for increasing it, with a baseline that decreases over time).
  • Acadia Center strongly recommends that a fulsome investigation of the process required to implement a TotEx regime be incorporated into the Proposal.