COMMENTS OF MASSACHUSETTS COMMUNITY ACTION PROGRAM DIRECTORS ASSOCIATION, INC. (MASSCAP)concerning Procurement of Default Service Power Supply for Residential and Small Commercial and Industrial Cus

Electricity prices have risen as much as 34% since restructuring began in 1998. For low-income customers, the increase is as much as 47%. A shortage of natural gas nearly caused electricity blackouts last winter. Prices have also become much more volatile and are scheduled to increase by as much as 28% more as Sstandard Offer ends this month -- prices would go even higher under proposals pending at the FERC.

Policymakers should focus on price and reliability instead of choice. Low-income assistance should be restored and expanded. electricity and natural gas contracts should be lengthened further, with a laddered mix smoothing price volatility. Cost-effective efficiency and renewable energy should be expanded in order to decrease demand for natural gas and for electricity and thereby lower the price of both. A Builder of Last Resort should be appointed to build generation on a cost-of-service basis if the market fails to prevent blackouts. This will also help control prices.