SECTION 1. Section 1B of Chapter 164 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by inserting after subsection (f) the following subsection:-

(g)(1) On or before January 1, 2020, each distribution company shall offer to residential and small commercial and industrial customers at least one option for a time of use rate, including differentials for energy supply, transmission, and distribution, designed to reflect the cost of providing electricity at different times of the day and year, but shall not include demand charges. Peak time periods for each rate shall be no longer than 6 hours in length per day and, as consistent with cost causation, price differentials must be sufficient to motivate customer response. Each distribution company shall provide each customer, not less than once per year, a summary of available rate options with a calculation of expected bill impacts under each. Options for a time of use rate shall be posted prominently on the website of each distribution company, including the ability to opt into such a rate online, and additional educational material. Should a customer opt into a time of use rate, the distribution company shall install all necessary equipment within 60 days of request. A customer may choose a different rate schedule after one year.

(2) If the Department approves rates that include time-varying pricing on an opt-out basis, the opt-in time of use rate structure may be discontinued, but each distribution company must offer a time-varying rate to all residential and all small commercial and industrial customers at all times. In considering an opt-out time-varying rate structure, the Department must consider the impacts of such a structure on low-income and vulnerable consumers and take appropriate mitigating actions, including the consideration of continuing low-income discount and other selected categories of customers on non-time-varying rate structures, and allowing these categories of customers to opt into time-varying rates.

(3) The Department is hereby authorized and directed to promulgate rules and regulations necessary to carry out the provisions of this subsection, including, but not limited to, (i) the procedure for procurement of time-varying default service offerings and (ii) separately accounting for the reconciliation of expenses for time-varying default service procurement from customers on time-varying default service.