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ompany/Industry Overview
NSTAR is Massachusetts’ largest investor-owned electric and gas utility that is responsible for transmitting and delivering electricity generated by independent, unregulated power producers to over 1.4 million households and businesses in over 100 communities in Eastern Massachusetts. A 1999 merger of Boston Edison Company and Commonwealth Energy System created NSTAR, which currently employs about 3,300 people. The company has revenues of approximately $3 billion and assets of $7.6 billion. NSTAR’s top competition is Energy East Corporation, National Grid, and Northeast Utilities. The company had a successful year in 2005, despite facing the challenge of buying reliable supplies of electricity for their customers in a market where energy prices have almost doubled over the years. While it appears that NSTAR operates as a monopoly due to the combination of customers having to pay prices that NSTAR sets and the fact that NSTAR largely controls the supply, it actually is in an oligopoly dominated by a few number of firms with very high barriers to entry.
NSTAR, being a giant firmament, responded to energy deregulation in Massachusetts by cutting its rates and selling most of its regulated electric generating assets. While it does operate in an oligopoly, NSTAR does face increased competition as a result of the deregulation. As part of the deregulation, the Department of Telecommunications and Energy (DTE) oversees all companies operating in the industry. Under these guidelines, government regulators oversee everything NSTAR does from customer service performance, safety levels and even price changes. If investigations into any activity conclu ...