Eversource rate tweak missed review deadline; new hearings ordered

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PITTSFIELD — A bid by Eversource to ease the impact of electricity rate increases in Western Massachusetts — a tweak spurred by public outcry — has hit a regulatory wall.

The state Department of Public Utilities on Friday ruled that the proposal will get a full and separate airing, rather than be folded into the company's ongoing rate case.

For large-scale electricity users in the Berkshires, the decision could produce new objections to the company's attempt to ratchet down the size of rate increases put on the table this year.

The DPU order gives customers in Eastern Massachusetts a chance to push back at an effort to have them shoulder a larger share of $95.9 million in new revenue Eversource wants to generate.

For residential customers, nothing would change. Their rates stand to increase by the same amount as initially proposed. If approved by the DPU, customers bills would go up in two phases starting Jan. 1.

In its initial filing Jan. 17, Eversource said it wanted rates for its Western Massachusetts Electric Co. customers to produce $35.7 million in new revenue over two years, an increase that the DPU calculates to be 27 percent over current revenue.

In comparison, the proposed change for Eversource's NSTAR Electric Co. unit was $60.2 million, a 7 percent hike. Together, the two companies have 1.4 million customers in the state.

The Attorney General's Office opposed the utility's request to change its rate-setting mechanism so late in the game. The request, outlined June 1, is part of a larger bid by Eversource to win state approval in a complicated case that includes $400 million in capital investments over five years.

Eversource outlined the new rate mechanism that would ease the burden on large Berkshires customers after the close of 10 public hearings held around the state and after the regulator ended the discovery process May 19.

Eversource claimed it was supplementing earlier statements and plans, not introducing new ones — an assertion the DPU dismissed.

"It is not typical for a company to seek to introduce a substantial change to a significant element of its rate case proposal on the eve of evidentiary hearings and after discovery has closed," the department said in its order Friday.

The company says it acted to trim power cost increases for its biggest customers in its WMECO region after hearing complaints, including from the Western Massachusetts Industrial Group.

But the Attorney General's office opposed the utility's request to change its rate-setting mechanism, saying its timing deprived customers of due process.

"When Eversource decides to change how its proposed ... rate hike is allocated, the public has the right to weigh in," said Chloe Gotsis, a spokeswoman for Attorney General Maura Healey. "Eversource's 11th-hour request requires a full review."

A representative of Eversource told The Eagle the utility remains committed to the change.

"After hearing concerns from customers at the public hearings, we filed the revised rate design option for the DPU and other stakeholders to consider," said Priscilla Ress, a spokeswoman for the utility. "We'll remain active in the rate review process, continuing to provide more information on this and other parts of our filing as requested."

The DPU dismissed Eversource's claim that because it is not seeking more money overall, the proposed change in its rate-setting mechanism could be incorporated into the same proceeding.

"The revised proposal does, however, shift revenues between NSTAR Electric and WMECO as compared to the original proposal," the order said.

While it would lessen rate increases for some customers — including in the Berkshires —- it would increase them for others, the DPU said. For that reason, "parties must be afforded a reasonable opportunity to present evidence and argument."

The DPU plans about a month of testimony on the proposed rate increases, then several months of deliberations by the commission that will decide the rate case.

It says its decision to schedule additional public comment on Eversource's proposed change in its rate-setting mechanism will still allow it to rule before Jan. 1.

That is the date Eversource seeks to phase in higher rates over two years. The regulator said Friday it would rule on that aspect of the rate case by Dec. 29.

On other elements of the rate case, the DPU will rule in November, sticking to its earlier time frame.

Reach staff writer Larry Parnass at 413-496-6214 or @larryparnass.


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