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About The Author:

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions.

He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive
Suite 301
Concord, NH 03301
(603) 225-9716









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STATELINE by Robert Olson

January 2002

Massachusetts Protects Customer Privacy While Providing For Retail Market Competition
by Robert Olson  --   Brown, Olson and Wilson, P.C.
(originally published by PMA OnLine Magazine: 2002/03/09)

The Massachusetts Department of Telecommunications and Energy ("DTE") issued Competitive Market Initiatives on June 29, 2001 directing distribution companies to expand competitive choices for default service customers. This Order was issued to spur competition in Massachusetts because it has not progressed as rapidly or conveniently as once expected. The Order also provides a mechanism for the DTE to work with utilities and marketers to improve the availability of retail markets to all customers. The DTE order specifies two Phases that must be achieved to make competition viable in Massachusetts.

During Phase I of this initiative, the DTE requires utilities to expand the customer lists ("Customer Information provided to energy suppliers to include additional personal information and identification of customer type and class. The Customer Information Lists were created to provide utility competitors access to customer information including name, address and rate class. DTE also required distribution companies to immediately provide expanded options to de-fault customers. As part of the expanded options program, the DTE and Massachusetts Electric Company created the "New Choices Program". This program provides information to customers on suppliers and instruction on price comparison methods.

In Phase II the DTE commenced an inquiry into the appropriate role of the distribution companies currently pro-viding customer service in Massachusetts.

The DTE memorandum dated December 11, 2001 high-lighted four areas of concern:

1) Should electric distribution companies perform the role of electricity brokers for their default service customers?

2) What customer information should be required for enrollment?

3) Should the shared customer information list include service delivery points and customers who receive service from competitive suppliers?

4) The appropriate use of the Internet for data transmission.

In response to the DTE memorandum, utilities and marketers provided information and opinions to the DTE. Among the respondents were Duke Energy Trading and Marketing, LLC ("Duke"), the "Competitive Suppliers" (AES New Energy, Inc., Green Mountain Energy Company, National Energy Marketers Association, The NewPower Company, SmartEnergy, Inc. and Strategic Energy Ltd.) and Usource (A subsidiary of New Hampshire based Unitil).

Duke’s response states support for the DTE Phase I guidelines for the Customer Information Lists. These guide-lines will require utilities to make their customer lists available to competitive suppliers and to include on the lists customers already taking advantage of competitive supplies in the expectation that these methods will create avenues of access for customers.

The Competitive Suppliers’ response includes crit-cism of the plan’s approach requiring distribution companies to perform functions currently performed by marketing companies. The Competitive Suppliers’ suggested that in the future, distribution companies would no longer provide generation services or compete in the retail energy market. Additionally, the Competitive Suppliers maintained that the directions pro-vided by DTE in Phase I for Customer Information Lists are too cumbersome for most utilities to undertake and that customers would be better served by use of internet-based data functions.

Usource recommended that customers file information with load aggregators and then the aggregators would purchase the necessary retail supply. Under this concept, customers’ privacy is protected, while allowing participation in the competitive market. The arrangement proposed by Usource requires traditional utilities to provide marketing tools to in-form the consumer instead of providing customer information to the competitive suppliers.

These three recommendations attempt to protect customer privacy while opening-up the retail market for electricity; they also provide protection for these companies and their current form of operation. The DTE will review these, and all other, recommendations at the hearing scheduled on January 16, 2002.

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions. He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive, Suite 301
Concord, NH 03301 | (603) 225-9716

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