FTC Staff Comment Before the Massachusetts Department of Public Utilities Regarding Its Investigation of Time-Varying Retail Rates for Electric Power

FTC staff submitted a comment in response to a request by the Commonwealth of Massachusetts Department of Public Utilities (DPU) for comments on its investigation of dynamic pricing for residential electricity customers. The staff comment articulated the potential benefits of dynamic pricing and identified fundamental difficulties in reconciling the “basic” rate-regulated service in Massachusetts with rapid innovations in services and equipment – such as “smart” appliances and electric cars – which enable customers to respond to incentives to reduce electricity consumption during peak demand. The comment recommended that DPU adopt a peak-time rebate plan similar to that adopted by Baltimore Gas & Electric (BG&E), once appropriate electric meters and associated consumer education and consumer protection programs are in place.