Standby Charges: Introductory Comments
Standby charges are charges to a distributed generation (DG) owner to cover the utility's cost of "standing by" with a distribution system that will be able to deliver electricity at times when the owner's distributed generation system goes down.
Standby charges represent a subset of the many rate issues that affect the growth of clean distributed energy resources (DER) in Massachusetts. These rates have a range of impacts on the owners and hosts of distributed resources, on other ratepayers, on electric utilities and on the state's economy and environment. In addition to the introductory information provided below, a separate web page provides more detailed information on these and other electric utility rates affecting distributed generation and related resources:
Currently, NSTAR is the only utility in Massachusetts that has implemented standby charges, and these charges apply primarily to non-renewable generation. These charges should be taken into consideration for applicable projects within the NSTAR territory. In other territories, standby charges may be considered by state utility regulators in the future on a generic basis or for individual distribution companie(s).
Customers in NSTAR territory who are installing non-renewable generation (generators fueled by gas, oil, diesel, or other non-renewable fuels) or fuel cells with capacity greater than 2 MW (2,000 kW) are currently subject to standby charges. Renewable energy projects, including fuel cells less than 2 MW in capacity (subject to certain limits), are not subject to standby charges. Detail on the NSTAR standby rate, as of 2004, is available here.
Additional information is available at the Overview page linked above.
This issue is subject to change through the regulatory process and through potential collaborative discussions, and this page and the linked pages are under revision. Suggestions for additional information or other comments or questions may be directed to:
Fran Cummings, RET Policy Director