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Boston State officials have issued an order authorising utilities to spend $220 million statewide on upgrades to the electrical grid over the next three years.

The upgrades aim to prevent outages, promote grid resilience and better accommodate connection of renewable energy generation. Modernisation processes will also result in smart meter investments, which will make way for dynamic pricing models.

"The many significant storm-related power outages the Commonwealth experienced this year highlighted the importance of improving our electric grid to increase reliability and shorten power restoration times," said Department of Public Utilities Chairman Angela O'Connor.

"By authorising these innovative grid modernisation investments, the DPU is working to ensure that Massachusetts ratepayers are provided with consistently reliable electricity for many years to come."

Utility customers generally pay a fixed rate for the power they use, which is determined by supply and demand. Smart meters will allow customers to pay according to whether they use during peak time or not.

"Today's Order will both allow better integration of renewable energy and energy storage into the electric grid, and improve the resiliency [of] Massachusetts' electric grid in the face of a changing climate," said Energy and Environmental Affairs Secretary Matthew Beaton in a statement.

"Recognising the role advanced meters play in increasing energy efficiency and reducing costs for ratepayers, the Order positions the Department of Public Utilities to engage with stakeholders to identify targeted advanced metering system investments that will maximse clean energy and ratepayer benefits."

Utilities now need to plan how they will invest and can only recover costs from ratepayers once the money has been spent.

Rate adjustments are only expected after February 2019.