Healey to DPU: Cut Eversource rates
AG says electricity rates should go down, not up
ATTORNEY GENERAL MAURA HEALEY is pushing state regulators to reject a bid by Eversource for a $96 million increase in electricity rates and instead order the utility to cut its prices by an unspecified amount.
Healey has been extremely vocal in her opposition to the Eversource rate hike, testifying in person at hearings in Boston and Pittsfield held by the Department of Public Utilities. But Healey is expected to take her opposition to a new level in a legal brief being filed on Friday, asking the DPU to not just cut the size of the Eversource’s rate request but eliminate it entirely and order a rate reduction.
“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 press release. “Customers in Massachusetts deserve a decrease in rates, not hundreds of millions in extra charges.”
Eversource is seeking a $96 million rate increase for 2018, which would boost the average monthly residential bill in eastern Massachusetts by 7 percent, or $8.45, and about 10 percent, or $11.64, in western Massachusetts. In addition to the $96 million rate hike, the attorney general’s office said Eversource is also seeking a rate hike of $188 million for 2019 through 2022, for a total rate hike over five years of $284 million.
In her brief, Healey is expected to argue that Eversource’s request for a 10.5 percent rate of shareholder profits is excessive and should be pared back to 8.8 percent, which would slice $42 million off of the company’s first-year rate request. Healey’s office said the 10.5 rate of return for shareholders would be the highest allowed return in New England and well above the average for the country – 9.3 percent.
Healey is also expected to argue that Eversource is using a test year for rate-setting calculations that distorts the company’s true expenses. Officials said the Eversource rate request identifies $419 million in capital expenditures during the test year, when the average over the previous three years was $275 million.In the attorney general’s brief, she voices support for the state’s efforts to reduce greenhouse gas emissions and to invest in clean energy, but she said Eversource’s $400 million plan to promote modernization of the electric grid and the use of electric vehicles “amounts to a request for a blank check, lacking in critical details and providing no guarantee that ratepayers will benefit from the proposed investment.”
Healey said Eversource has a “stable cost structure, record stock price, and outsized investor returns over the last few years,” the attorney general’s press release said. The legal brief also points out that Eversource has spent hundreds of millions of dollars on tangential investments recently. It purchased Aquarion Water Co. of Bridgeport, Connecticut, in June for $880 million in cash and $795 million in assumed debt and it purchased a 50 percent interest in Bay State Wind in December. Bay State Wind is one of the companies expected to vie for a contract to generate electricity by erecting turbines off the coast of Massachusetts. The attorney general’s office said Eversource’s partnership with DONG Energy “could cost billions of dollars.”