WHAT IS A CHANGE IN LAW AND HOW CAN IT RESULT IN A RATE INCREASE?

A change in law is a regulatory event that results in a direct, material increase in costs during the term of an electric power supply contract.

For example, in July 2020, the Massachusetts Department of Environmental Protection finalized the Clean Energy Standard Expansion (CES-E), which requires retail suppliers to annually demonstrate the use of clean energy to generate a specified percentage of their electricity sales. This expanded purchase obligation resulted in unexpected supplier costs, which in turn resulted in rate increases effective with the January 2021 meter reads.

All retail suppliers (whether they supply municipal aggregations, Basic Service or individual consumers) are required to comply with this state mandate. Therefore, all contracts signed after January 1, 2020 but prior to regulations being finalized were subject to a rate increase to reflect this new initiative.