Massachusetts Rules on Customer Eligibility

Addressing several utility requests for clarification as to what customer lists they must provide to cities and other governmental entities interested in initiating municipal aggregation programs, the Massachusetts Department of Public Utilities (DPU) has answered that the utilities must forward information on three particular categories of customers, but it deemed another three groups of customers to be ineligible for aggregation. The department indicated that its decision had been guided by concerns related to both customer privacy and preservation of a competitive energy market. 

Under the concept of municipal aggregation, which sometimes is referred to as community choice, a city, town, or other governmental jurisdiction will procure electric supply on behalf of all its residents. The idea behind such plans is that a collectively greater level of consumption will translate into enhanced bargaining power for the purchasing agent. 

However, in addition to the potential for pricing advantages from aggregation, such programs also give local communities an opportunity to chart their own course for how their electricity supply is sourced. For instance, aggregation could allow a city to follow the will of its citizens in opting for renewable energy or other types of generation that produce fewer greenhouse gas emissions. 

As interest in community choice efforts have grown, municipalities began approaching incumbent electric utilities with requests for information about customers residing within the cities' respective corporate boundaries. However, because Massachusetts had restructured its electric markets some years ago, which introduced individual customer choice, the utilities were unsure how to respond to the towns' requests. 

That is, the utilities, led initially by Massachusetts Electric Company and Nantucket Electric Company (each d/b/a National Grid), had queried whether a customer that already takes supply service from a competitive provider should be included in the customer lists forwarded to a city. The utilities raised the issue of whether a customer's existing status as a patron of an alternative service provider would affect the customer's ability to be included in a municipal aggregation plan. 

In examining the matter, the DPU found that a customer's participation in an alternate or optional electric supply program would impact their eligibility to join community choice offerings. In reaching that conclusion, the commission looked at six distinct kinds of customers: 

1. Those taking basic service from a utility; 

2. Customers receiving basic service from a utility who have signaled that they do not want their information shared with competitive suppliers for marketing purposes; 

3. Customers taking basic service but also subscribing to a utility-sponsored green power program pursuant to which they can be concurrently enrolled in either basic supply or competitive supply; 

4. Those receiving basic service who have explicitly asked that their utility not facilitate registration with a competitive supplier; 

5. Customers taking basic service and also purchasing a green power product but one which does not permit switching to a competitive supplier; and 

6. Customers already enrolled with a competitive electric provider. 

In the end, the department held that the first three categories should be treated as eligible to join municipal aggregation programs while the latter three should not. From the DPU's perspective, because a customer's election to go with a competitive supplier is an affirmative choice on the part of the customer, and because there can be penalties imposed for a customer's early termination of a supply agreement, it would be inappropriate to include such customers on municipal aggregation lists. The department expounded that a customer's decision to go with an alternative electric supplier "should not be overridden by automatic enrollment in a municipal aggregation" plan. 

The department similarly found that utilities and cities alike should defer to a customer's expressed desire to not be enrolled with a competitive supplier. In that municipal aggregation would entail just such a transfer, the DPU said it obviously would be improper for such customers to be reflected on the lists of eligible customers provided by utilities to municipal aggregation administrators. 

Although precluding the utilities from identifying certain customers for purposes of community choice initiatives, the DPU made clear that it was not also prohibiting the utilities from providing their load data to a requesting city or town. The department concurred with the municipal parties that having access to a utility's total load data would be helpful in negotiating a contract with potential suppliers. Re Issues Relating to Municipal Aggregation Programs, D.P.U. 16-10, Aug. 23, 2017 (Mass.D.P.U.).