AG Maura Healey set to testify in Pittsfield against Eversource rate hike proposal
PITTSFIELD — At Onyx Specialty Papers in Lee, electricity costs for 2016 were $775,000.
Under a rate hike proposed by Eversource Energy, the annual costs of powering the operation would swell to $1.2 million by 2019, according to company President Patricia C. Begrowicz.
A new rating mechanism that is also included in the Eversource proposal would cause electricity costs at Onyx to increase by 3.5 percent annually.
"I would say that definitely makes it challenging to grow," Begrowicz said this week during a meeting between business leaders and The Eagle's editorial board.
Eversource is seeking approval by the state Department of Public Utilities to raise its rates by $96 million over the next two years to erase a $60.2 million operating deficit in Eastern Massachusetts and a $35.7 million shortfall in the west. Although the operating deficit in Eastern Massachusetts is larger, the impact of the proposed rate increase would be greater in Western Massachusetts because Eversource has far fewer customers who live here.
Of the utility's 1.4 million statewide customers, 1.2 million live in eastern Massachusetts compared to just 215,000 in the western part of the state. If approved, the proposal would add $11.64 to the average monthly bill for Western Massachusetts residential customers and $8.45 for those that reside in the east when the increase goes into effect Jan. 1, 2018.
Attorney General Maura Healey, whose office is the legal advocate for the state's electricity ratepayers, has been leading the charge against the increases.
Healey will be in Pittsfield on Monday to testify personally against the Eversource request during a DPU public hearing. The hearing is scheduled for 6 p.m. at the Berkshire Athenaeum.
"It's a bad deal for people across the state, but it's going to be particularly hard-hitting for Western Massachusetts," Healey said in a telephone interview with the Eagle on Thursday.
Healey said either she or her staff will appear at the DPU's five remaining public hearings on the request, three of them scheduled to take place in Western Massachusetts. But the Pittsfield public hearing is the only Western Massachusetts event that she will be able to attend personally.
In a statement, Eversource said the change in the distribution rate is being requested in order for the company to expand its commitment to reliability and clean energy technologies, and is part of a "longer term plan" intended to deliver the benefits of a "modernized grid" to its customers.
"Over the past five years the business has grown and technology has grown to keep the system reliable," said Eversource spokeswoman Priscilla Ress. "We've been working to modernize the electrical systems and also investing in advanced technology solutions to protect the integrity of the grid."
By law, the basic distribution rate is required to change every five years, Ress said. The company's distribution rates have remained stable over the last 10 years due to efficient cost management while electric reliability has improved, the utility said.
For Eversource's commercial and industrial customers, the proposal would increase electricity rates up to 37 percent in Western Massachusetts, while the rates for businesses in the east would decrease, according to information compiled by Onyx that was presented to the Berkshire Business Roundtable in February. Electricity rates for commercial and industrial customers in Massachusetts are already the third highest in the country, behind only Alaska, Connecticut and Hawaii.
In January 2007, the large commercial and industrial customers of what was then known as the Western Massachusetts Electric Co. saw average delivery rate increases of nearly 55 percent. During the summer and fall of that year, three paper mills closed in Western Massachusetts costing the area about 400 jobs.
"Not only are we very concerned about the economic impact on Berkshire County's largest employers, we are also concerned that an increase of this magnitude will hinder economic development — either by thwarting growth of existing businesses or discouraging new businesses from coming to the Berkshires," according to ta statement that was included in the information that was presented by Onyx.
Jonathan Butler, the president and COO of 1Berkshire, the county's leading economic development agency, said the local business community and the Berkshire's state legislative delegation have formed a "working group" to discuss the changes and impacts that would occur as a result of the rate increase.
"We've also engaged the mayors of both cities," Butler said during the meeting at The Eagle. "Basically, what we're trying to do is have a collective understanding of the impact of this and speak with one voice. We think it's important that the Berkshires and Western Mass. do that.
"Our goal is to have an effective turnout next Monday at the rate hearing," Butler said. "We're planning to make sure that the business community is well represented in that.
"Our hope is that we can get somewhere on this rate case where the impacts are considered to be fair, (and) that's equitable with the eastern side of the state especially the businesses that we're competing with," he said. "The way it's proposed, it's a very unbalanced distribution."
Although the business community wants to speak with one voice, the business leaders who attend Monday's public hearing have decided to speak separately, said Begrowicz, who also chairs the Western Mass. Industrial Group.
"The impact is much greater if it boils down to each business and what it means for them," Begrowicz said. "My business is one of the top electricity users in the county, and the numbers are not insignificant. So we think that if each company gets up and talks, the cumulative effect will be more positive than just a general statement."
Onyx, Crane Currency in Dalton and Berkshire Health Systems, the county's largest employer, are the Berkshire's largest electricity users, Begrowicz said.
The possible impact on municipal services is also extensive.
"The impact for our 12 school buildings and the city of Pittsfield umbrella is massive," said Pittsfield schools Superintendent Jason "Jake" McCandless.
Healey said she is concerned about the effect the proposed rate increase will have on Western Massachusetts businesses.
"It's important to me and everyone in Western Massachusetts that communities thrive and grow and create jobs. Energy costs are part of that," she said. "That's why our team wants to make sure this increase will be as fair as possible and spread fairly across the state. I've spoken with numerous folks in Western Massachusetts and a number of businesses. I take that seriously. It's very important."
Reach Business Editor Tony Dobrowolski at 413 496-6224.
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