Information
Unitil/FG&E Electric Plan Fact Sheet
Although certain rate components will change as a result of the order,
the overall level of customer bills will be unchanged and will continue
to reflect the 10% rate decrease implemented March 1, 1998.
Key aspects of the Unitil/FG&E Restructuring Plan as approved by the
MDTE include the following:
Standard Offer Service
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Standard Offer Service (SOS) pricing will increase to 3.5 cents/kilowatthour,
from the present level of 3.1 cents/kilowatthour, for all customers. SOS
service is provided to customers prior to their choosing a competitive
supplier. The increase will therefore tend to encourage competition.
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As of March 1, 1999, power for SOS will be purchased from Constellation
Power Services Inc. Constellation was the winning bidder in a solicitation
conducted by Unitil/FG&E last fall. This solicitation was the first
successful SOS auction in Massachusetts.
Power Supply Divestiture
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The Plan for Unitil/FG&E to divest its power supply portfolio, which consists
of portions of three generating units as well as four long term power contracts,
is now approved. In a related ruling, the MDTE has requested comments relative
to the proposed sale by Unitil/FG&E of its ownership interest in the New Haven
Harbor generating unit. That proposal was filed November 20, 1998. Unitil/FG&E
is finalizing negotiations on the divestiture of the remainder of its power supply
portfolio. When consummated, the divestiture should provide for an additional 5%
rate reduction for all customers.
Default Service
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Default Service, which is available to customers who lose a competitive power
supply, will also be priced at 3.5 cents/kilowatthour, as opposed to a variable
price, and further policy on default service will be determined by the MDTE in
a generic proceeding.
Transition Cost Charges
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The company’s Transition Costs, estimated at approximately $140 million, have
been approved. Transition costs are costs relating to historic power supply
obligations which would otherwise not be recovered after competition is introduced.
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Transition Cost Charges will be levied as an equal charge across all customer
classes, and the charge will be reduced coincidentally with the change in SOS
prices to insure that customer’s 10% savings continue. Unitil/FG&E had proposed
different charges for different customer classes depending on their historic
power supply responsibility, but this proposal was rejected.
Other Rate Components
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Other rate components will be recalculated in accordance with specific findings
in the Order. Rate design issues will be discussed at the Technical session.
Seabrook Amortization Charges
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The Seabrook Amortization charge will continue to be included as a component
of the distribution charge, however the MDTE is requiring a change in the
underlying calculations. This change will be discussed at the Technical Session.
Affiliate Conduct Rules
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The Company’s Motion for Exemption from the Affiliate Conduct Rules was
granted in part. Unitil Resources Inc., Unitil’s competitive affiliate, is
free to compete in Massachusetts, but may only compete for customers of FG&E
under strict separation requirements.
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