1. MASSACHUSETTS ELECTRIC RESTRUCTURING ROUNDTABLEFuture of Retail Competition in Massachusetts January 18, 2002 Paul Vasington Commissioner, Mass. DTE

2. Topics • Past performance is no guarantee of future results • What has the DTE done recently to promote retail competition? • What’s coming next?

3. 1997 RESTRUCTURING ACT • Distribution companies provide two types of generation service: Standard Offer and Default • Standard Offer Service: • Provided to distribution company customers of record as of March 1, 1998, who choose not to purchase electricity from a non-affiliated generation company. • Offered for a transition period of seven years (3/1998-2/2005) • Prices and terms approved by the DTE after a competitive bid process that is reviewed and approved by the DTE • Prices for Standard Offer Service were subject to a 10% rate reduction on March 1, 1998, and an additional 5% inflation-adjusted rate reduction on September 1, 1999

4. 1997 RESTRUCTURING ACT • Default Service: • Provided to new customers (i.e., began service after March 1, 1998), customers who switch back from a competitive supplier, and all customers not using a competitive supplier after Standard Offer Service ends (2005). • Default service supply must be procured through competitive bidding; provided, however, that the default service rate shall not exceed the average monthly market price of electricity; and provided, further, that there shall be payment options with rates that remain uniform for periods of up to six months. • Default service rates have been and are tied to Standard Offer Service rates, until the DTE implements the pricing and procurement provisions of DTE 99-60.

5. 2002 Standard Offer Prices

6. 2002 Default Service Fixed Prices

7. Competitive Market Initiatives - DTE 01-54, June 29, 2001 - “The primary objective of the investigation is to identify and implement initiatives that would expand the range of competitive options available to consumers.”

8. DTE 01-54 (cont.) - DTE directed distribution companies to provide the names, addresses, and rate classification of its default service customers to licensed competitive suppliers and electricity brokers, upon request. - Supplier is required to agree that the information will be used only for the marketing of electricity-related services. - Distribution companies also are required to compile a list of suppliers that are ready to provide competitive generation offers to customers in its service territory.

9. DTE 01-54 (cont.) - DTE 01-54-A, October 19, 2001 - Customer Information List. - Name, addresses, and rate class. - Historic usage data, unless a customer “opts out.” - No info or “Filtering” related to customers’ payment or credit histories and no account numbers. - Include customers’ service and mailing addresses, as well as contact persons, where available. Include meter read cycle.

10. DTE 01-54-A (cont.) - Customer Information Lists - Include both standard offer and default customers. - Formatted consistently among distribution companies and available in electronic form, updated quarterly. - List must be used for electricity-related services, including both supply and demand related activities. - List is available at no cost.

11. DTE 01-54-A (cont.) • Convene a customer information working group to develop a detailed implementation plan. - “Opt out” process - customer education • First meeting on October 24, 2001. 3 additional meetings have been held.

12. DTE 01-54, Next Steps • Phase II • Appropriate role of the distribution company as an electricity broker (i.e., Internet-based auction or direct authorization). • Specific applications of electronic signatures as Internet-based authorizations for changing suppliers. • Next Phases • Distributed generation (interconnection standards and back-up rates) • Allocation of costs for default service

13. DTE 01-28 - Metering and Billing Services docket - Tariffs for advanced meters were approved for July 1, 2001. Further investigation on broader availability is in progress. - Partial payments are allocated in direct proportion to distribution company and supplier current charges and arrears – no preference for distribution charges.

14. References: WWW.STATE.MA.US/DPU paul.vasington@state.ma.us