Power Company's Proposed $300M Increase Faces Staunch Opposition

MASSACHUSETTS – Attorney General Maura Healey on Thursday asked the Department of Public Utilities to reject Eversource Energy's proposed $300 million rate hike in Massachusetts.

In a Jan. 17 filing, Eversource requested the DPU approve a first-year $60 million increase for NSTAR customers and $36 million increase for Western Massachusetts Electric Company customers.

The increase would affect 1.4 million Massachusetts residents who use Eversource, raising NSTAR bills by more than $100 and WMECO bills by more than $150 in the first year.

"[T]his [case] is an important opportunity for the Department to reset the balance between company profits and customer rates," Healey said. "When so many customers today are struggling to make ends meet and businesses are trying to lower their energy costs to maintain and grow jobs, it is time to return money to customers, not to raise their electric bills to benefit highly profitable utility companies."

Healey has questioned the need for a rate increase, given Eversource's recent returns. According to records cited by Healey during Thursday's testimony, between 2010 and 2015 Eversource's shareholders received a cumulative total return of 89 percent and in 2015, NSTAR reported a return of more than 13 percent.

She told the DPU that no public utility commission in the country allowed a return that high.

Eversource's request would allow for a 10.5 percent return on equity, higher than last year's nationwide average of 9.3 percent allowed by public utility commissions. Healey challenged the appropriateness of such an increase, given the ROE in neighboring states. Connecticut allowed for an ROE of 9.1 percent in 2016 and Maine allowed 9 percent.

According to the attorney general's office, this plan would increase rates by 4 percent – or $50 million – each year until the next rate case in 2022. This is in addition to the initial $96 million requested in the first year.

Eversource Massachusetts spokesperson Rhiannon D'Angelo defended the potential rate hikes as part of a long-term plan to provide a "modernized" grid and continue to improve service to customers.

"Over the last 10 years, Eversource customers have seen a dramatic improvement in the frequency and duration of power outages," D'Angelo said in an email. "Over the past 10 years, the number of outages that customers experience is down by 24 percent and the duration for the outages have decreased by 16 percent. With continued investments in the electric system and the expansion of our grid modernization efforts, we fully anticipate that we’ll continue to build on that improvement which is so important in our customers’ day-to-day lives."

D'Angelo added that the new rates would recover money spend to update the current system and help launch the "Grid-Wise Performance Plan," which includes technology to reduce the frequency and duration of power outages, enhancement of the grid management system, an electric vehicle charging infrastructure program and other energy-saving initiatives.

If approved, the first increases would begin Jan. 1, 2018.

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