Massachusetts Department of Public Utilities

The Massachusetts Department of Public Utilities (DPU) has approved a discount electric rate contract for defense contractor Raytheon Co., a customer of Massachusetts Electric Co. (ME). But the secrecy surrounding the contract has created an uproar.

Although the terms of the contract are confidential, Raytheon said the three-year contract would yield "significant savings" on its $20-million annual electric bill. ME called the discount an "economic development" contract, which would keep Raytheon and its 17,500 employees from leaving the state.

The Massachusetts Division of Energy Resources (DOER) has filed its electric restructuring proposal, "Power Choice," as part of the Massachusetts Department of Public Utilities investigation into competition. The proposal will be considered along with restructuring plans submitted by the state's three largest utilities.

Power Choice calls for electric utilities to voluntarily separate into generation and distribution companies. Customers would continue to receive distribution service through their present providers; generation would become competitive.

When Joel Singer headed the North American Gas Practice at Arthur D. Little, Inc., he helped large companies rethink business strategies to adapt to deregulating markets. Singer called his business model the "competitive strategy framework": "You do not reengineer your way into growth. You've got to figure out what's the growth strategy, then look at building business processes around that."

Singer's approach is becoming evident at Bay State Gas Co. in Westborough, MA.

"market-based" electric tariff for Fitchburg Gas & Electric Co., a combined electric and gas utility. The "Energy Bank Service" for new or expanding industrial customers offers rates competitive with average U.S. industrial rates.

performance-based awards under the company's executive incentive payment rules were based on criteria related to cost of gas and operations and maintenance expense.

Investigations of changes in the structure of the electric utility industry are growing at the state level.

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).

Question: What is your relationship with the state legislature? Do lawmakers in your state show interest in utility regulation? Should PUCs work more closely with state legislatures?Response by Boyce Griffith, Chairman, West Virginia Public Service Commission:

The West Virginia PSC's relationship with the legislature is good. The West Virginia legislature has been active in utility regulation. I believe West Virginia utilities already work closely with the legislature and will continue to do so.

Question: Will your commission still be around in the year 2000? If so, what will it look like? Are you restructuring your commission with the same fervor you devote to electricity, gas, and telecommunications?Response by Nancy McCaffree, Chair, Montana Public Service Commission:

As a regulator I have had the opportunity to listen to economists, energy planners, and other professional soothsayers. I have come to the conclusion that the only certainty pertaining to future forecasts is that they will be wrong 100 percent of the time.

The Massachusetts Department of Public Utilities (DPU) has accepted a settlement agreement calling for approval of gas-forecasting, supply-planning and demand-side management (DSM) efforts by Berkshire Gas Co., a natural gas local distribution company (LDC). Nevertheless, the DPU directed the LDC to undertake a good-faith effort to quantify avoidable environmental costs

and to incorporate those findings in rescreening its DSM options.