Utilities want higher rates to update electric grid
BOSTON — Massachusetts electricity consumers, who already pay some of the highest rates in the nation, can expect to dig deeper into their pockets in coming years to foot the bill for upgrades to the regional power grid. Utilities are increasingly seeking rate increases to offset investments to modernize aging gas and electric distribution systems. Eversource has filed a request with the state Department of Public Utilities to raise rates by nearly $300 million over five years. The utility wants to raise rates by $96 million for its 1.4 million customers in 2018, and $188 million more over the next four years. For customers in eastern Massachusetts, the proposed increase would add $8.45 to monthly bills. In the western part of the state, it would add an average of $11.64 a month. Eversource said it plans to use the additional money to upgrade its delivery system, reduce outages and invest in its network of electrical vehicle charging locations. But the request has drawn the attention of Attorney General Maura Healey, who is empowered to act as an advocate for consumers. She has asked the Public Utility Commission to reject the proposed increase. "As a regulated public utility, Eversource is required to justify why the state should permit it to raise electric rates on residents and business customers," Healey said in a recent brief to state regulators. "Our initial evaluation shows that Eversource should be returning profits to customers as savings, not raising rates.” Eversource spokeswoman Priscilla Ress defended the increase, saying the company "plays a critical role in providing the reliable electricity that's necessary to help fuel the economic boom we're witnessing in Massachusetts." “Through a very transparent filing, our response to thousands of discovery questions, and a month-long public hearing process, we’ve demonstrated the need to recover the current $96 million deficit as well as for a funding mechanism for future upgrades and technology investments to modernize the electric grid,” she said in a statement. Eversource’s request seeks 10.5 percent in allowed shareholder profits — or return on equity — which, if approved, would be highest in New England. The regional average rate is 9.1 percent, according to the Healey’s office. In Connecticut, the maximum allowed is 9.1 percent. In Maine, it’s 9 percent. Healey has asked state regulators to set Eversource’s return-on-equity rate at 8.8 percent. In filings with regulators, she said the company’s plan “essentially amounts to a request for a blank check, lacking in critical details and providing no guarantee that ratepayers will benefit from the proposed investment.” Last year, Healey criticized a decision by the Department of Public Utilities to allow another regulated company, National Grid, to collect a 9.9 percent, $100 million, shareholder profit margin. The rate increase, which went into effect Oct. 1, bumped up the average residential bill by $7.75 a month. National Grid has about 1.3 million customers in Massachusetts, including many on the North Shore. The company has invested heavily in recent years to modernize its distribution system. In 2016, the company spent more than $865 million statewide to upgrade more than 8,500 poles, 6,000 transformers and 190 miles of power lines. In December, Healey asked the department to investigate why the allowed profits for Massachusetts utilities are higher than those in neighboring states. If Eversource’s rate increase is approved, it would go into effect Jan. 1, 2018. Christian M. Wade covers the Massachusetts Statehouse for The Salem News and its sister newspapers and websites. Email him at cwade@cnhi.com.
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