BOSTON -- The Department of Public Utilities has issued two orders that will allow Massachusetts to become the first state in the country that requires electric distribution companies to take affirmative steps to modernize the electric grid.

Under the DPU’s order, each utility is required to develop and implement a 10-year modernization plan that must be upgraded regularly.

A companion order on time varying rates requires utilities to set prices that take into account the varying costs of electricity and allow customers to make informed decisions on their electricity use during the day.

Most customers currently pay a flat rate, but the order on time varying rates recognizes that the cost of electricity changes dramatically over the course of a day and year.

"The grid modernization order builds on Governor Patrick’s commitment to strategic investments in innovation and infrastructure, and creates jobs," said Energy and Environmental Affairs Secretary Maeve Vallely Bartlett. "By implementing grid modernization, Massachusetts will once again be leading the nation in the clean energy revolution and enabling customers to participate in how and when they consume energy."

The DPU determined that grid modernization will empower customers to better manage and reduce electricity costs; enhance the reliability and resiliency of electricity service in the face of increasingly extreme weather; encourage innovation and investment in new technology and infrastructure, strengthening the competitive electricity market; and address climate change and meet clean energy requirements by integrating more clean and renewable power, demand response, electricity storage, microgrids and electric vehicles, and providing for increased amounts of energy efficiency.

Grid modernization and time varying rates also will allow the Commonwealth to reduce peak demand, a tremendous savings opportunity for all customers, not just those who respond to price signals.

"This order establishes the platform and the incentives for utilities and other businesses to innovate and invest in new technology, to continue to upgrade our current infrastructure, and to increase the use of renewable energy, electric cars, energy storage, and microgrids," said DPU Chair Ann Berwick. "At the same time, customers will be empowered to control their electricity use and save money."