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July 24, 2017

Healey asks DPU to reject Eversource rate hike

Attorney General Maura Healey asked the Deparment of Public Utilities to reject a proposed rate increase from Eversource Energy.

Attorney General Maura Healey on Friday plans to ask state regulators to not only reject Eversource's request to boost its electric rates by $96 million but to also order that the utility decrease the rates it charges customers.

Eversource in January filed a request with the Department of Public Utilities to raise its charges by 7 percent in eastern Massachusetts and by roughly 10 percent in the western part of the state, with the first phase of increases taking place Jan. 1, 2018.

Healey's office has been challenging the request and on Friday afternoon plans to file a brief arguing that the proposed increase is unwarranted.

"As customers and businesses across our state are looking to trim their costs, now is not the time to burden them with a 20 percent bill hike to benefit a company that is already highly profitable," Healey said in a statement. "Customers in Massachusetts deserve a decrease in rates, not hundreds of millions in extra charges."

The plan would raise rates by $284 million over five years, adding nearly 20 percent to customers' electricity bills, according to Healey's office.

Through subsidiaries NStar Electric and Western Massachusetts Electric Company, Eversource has 1.4 million electricity customers in 140 Massachusetts communities.

In an email to customers, Eversource this week said the rate change "requests a net increase in annual delivery revenue of $60.2 million, representing a 7 percent increase in those revenues to support our electric distribution operations." The request responds "to increases in operating and maintenance costs and capital costs associated with investments in the electric network since the last decision by the DPU approving a general distribution rate increase in 2006," the email said.

"Customers are experiencing fewer and shorter outages as a result of our smart investments in sophisticated technology," Craig Hallstrom, president of Massachusetts Electric Operations at Eversource, said in a January statement announcing the filing. "We've also worked hard to improve reliability for customers with efforts like our enhanced tree trimming programs, all while holding the line on rising costs. Now, we're proposing to increase that commitment and utilize the latest engineering advances - including electric vehicle infrastructure and energy storage systems - for the benefit of customers."

Eversource in June filed a revised proposal, shifting revenues between the eastern and western parts of the state compared to the original filing.

Healey's brief asks the DPU to reject Eversource's multi-year rate plan, arguing the "proposal creates an up-front guessing game that creates substantial risks for ratepayers that Eversource's electric distribution companies will be over-compensated, with very little risk for [the company] that it will suffer low returns."

Previously, Healey has asked the DPU to look into the company's average rate of return on equity, urging regulators in March to ensure Eversource "is not over-earning at the expense of its customers."

The brief Healey plans to file on Friday challenges the need for a rate increase, pointing to what Healey's office described as "outsized investor returns." According to the brief, Eversource shareholders in 2015 and 2016 "earned far more" than others who made similar investments.

The DPU has been holding public hearings on the rate increase request, with the next scheduled for July 26 at the department's Boston offices, followed by Aug. 1 in Pittsfield and Aug. 2 at Cape Cod Community College.

A group of local officials and environmental groups have also raised concerns about Eversource's proposal, which they say would reduce the compensation paid to cities and towns for solar projects by about 40 percent.

"The Eversource proposal that impacts these municipal solar projects is part of broader rate proposals to reduce customer control over bills and lower incentives for local clean energy," Acadia Center staff attorney Mark LeBel said in a statement. "Eversource's proposals would set back efforts to promote energy efficiency, electric vehicles, storage, and efficient electric heating too. The DPU should be looking for economically sensible ways to advance innovative clean energy efforts and should not roll back the progress the Commonwealth has made to date."

Officials from Arlington, Lexington, Natick, Newton, Wayland, Weston and Westwood signed a comment letter to the DPU saying their communities stand to lose a combined $32 million over the next 20 years if the proposed rate change goes into effect.

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