Hedlund, Bradley Look to Protect Hingham Water Rate Payers

A bill filed by State Senator Robert Hedlund (R-Weymouth) and co-sponsored by Representative Garrett Bradley (D-Hingham) that would help protect water rate payers and municipalities was included in the final version of energy cost containment legislation passed by the Legislature on Tuesday.

The legislation provides authority to the Massachusetts Attorney General to intervene on behalf of water utility customers in water rate cases, which could save municipalities thousands of dollars in legal fees and result in lower water rates for private water customers.

In order to raise its rates, a water company must apply to the Department of Public Utilities, who then makes a ruling on whether to grant, deny, or partially grant the rate hike request. Municipalities often intervene in rate hike cases to dispute inappropriate rate increases, and often incur thousands of dollars in legal and consulting fees in the process. 

This legislation will give the Attorney General, through the Office of Ratepayer Advocacy, the same intervening power on behalf of water utility consumers and municipalities that the office currently holds in cases involving gas, electricity and telecommunications utilities. In testimony submitted to the Judiciary Committee, Attorney General Martha Coakley described the added responsibilities as “common sense” and a “natural fit for the Office of Ratepayer Advocacy.”

Sen. Hedlund and Rep. Bradley originally filed the legislation last June in response to , which Hedlund described “the most ridiculous request to date”. Despite overwhelming support, the bill lingered in committee for over a year until Hedlund was appointed to the six-member conference committee charged with reconciling a key piece of energy legislation. Ultimately, Hedlund was able to include the bill language in the final version of the major energy bill, with Bradley providing key support in the House.

Hedlund noted his rationale for the legislation, stating: “Years ago when the Department of Public Utilities and Office of Ratepayer Advocacy structure was set up, water wasn’t an issue. It was plentiful and it was cheap. Additionally, most water is distributed by municipalities, so there was traditionally no need for the Attorney General’s involvement.”

While the majority of water service is provided directly by municipalities or the Massachusetts Water Resources Authority (MWRA), several towns get their water from private, for-profit companies.  Aquarion Water Company is one such company, and provides water for the towns of Hingham, Hull and part of Cohasset. Aquarion, a subsidiary of Australian-owned Macquarie Bank, has applied for several rate hikes over the years, and Aquarion customers pay among the highest water rates in the country.

In 1996, when Mass.-American Water owned the utility, ratepayers saw their rates jump 154 percent (Federal mandates were partly to blame). In 2001, ratepayers were subject to a 10.7 percent hike (after the utility proposed a 16.7 percent increase). In 2008, Aquarion proposed a 24.7 percent rate increase and was granted an increase of 21.4 percent. Most recently, Aquarion was granted a 10 percent increase this past Spring after originally proposing a hike of 16.5 percent.

Currently, the Attorney General’s office has no power to act on a town’s behalf in water rate cases. Municipalities are often forced to retain private counsel to oppose the rate hike proposals, incurring exorbitant legal bills in the process. Intervention by the Attorney General, through the Office of Ratepayer Advocacy, would help mitigate these legal expenses. When gas, electric, and cable utility companies propose rate hikes, the Attorney General’s office is authorized to provide legal assistance to the towns.

Rep. Bradley said he was pleased that Coakley was given power to intervene in water rate proposals.

"The language echoes the bill filed jointly by Senator Hedlund and myself earlier this year, and will give towns such as Hingham and Hull another powerful ally in their fight to keep water rates low and ensure quality of service," Bradley said.

Hedlund said water ratepayers are far more likely to attain a fair outcome in rate hike proceedings with support from the Attorney General’s office.

Hingham State Senator said he was proud to offer this bill on behalf of the ratepayers and municipalities.

-The Office of Robert Hedlund.