1. Effect of LMP on Massachusetts Electric’s Retail Rates
Carlos A. Gavilondo
VP, Distribution Regulatory Services
Massachusetts Electric Company
February 28, 2003

2. Mass. Electric Serves … Approximately 1.2 million customers
Peak load of approximately 4,500 MW
Customers in each Load Zone
NEMA/Boston – 23%
WCMA – 47%
SEMA – 30% 2

3. Massachusetts Load Zones3

4. LMP Effect on Retail Rates
Depends on Supply Type, Load Zone and Customer Rate Class
Standard Offer Customers
SOS customers will see no zonal price differentials, regardless of zone or size
“Settlement rates”
~836,000 customers, ~61% of total kWh deliveries
Some Default Service and Competitive Supply Customers will see zonal effects 4

5. Default Service; Competitive Supply
Default Service Customers
No zonal difference prior to May 1, 2003
Beginning May 1:
Large and Medium-sized customers will see zonal prices
~3,900 customers, ~7% of total kWh deliveries
Small commercial and residential customers will not see zonal prices; i.e., zonal default service bids will be averaged across the 3 zones
~346,000 customers, ~13% of total kWh deliveries
Competitive Supply Customers
Depends on contract
~20,000 customers, ~19% of kWh deliveries 5

6. Steps on the Road to LMP Implementation
Assign each customer to a Load Zone
Based on customer’s electric supply source
Maintained in CIS
Included in supplier EBTs
Reflected on customer lists available to suppliers
Indicated on customer bills as of March 3 6

7. Portion of Sample Bill 7

8. More Steps on the Road to LMP Implementation
Procure Default Service Zonally
Zonal procurements by customer class (although average pricing for small customers)
RFPs issued last week
Finalize protocol for monitoring and reflecting zonal changes; communications; etc. 8

9. Final Thought . . .
“You’ve got to be very careful if you don’t know where you’re going, because you might not get there.”
Yogi Bera 9