Eversource details impact of proposed rate shift
In a legal notice published Wednesday in The Eagle, Eversource said the shift on rates it announced June 1 cannot be easily summarized for the company's commercial and industrial customers.
If approved by the state Department of Public Utilities, new rates for all customers would go into effect in two phases — on Jan. 1, 2018, and on Jan. 1, 2019. The company says it needs the $96 million in additional revenue to cover investments it has already made in its distribution system. The increases are related to the cost of getting electricity to Eversource customers, not the price of the power itself.
While the legal notice lists increases for residential Eversource customers, a message in bold, black type says that for some of the biggest electricity users, the impact of higher rates will "vary significantly based on customer class and the amount of usage."
"Commercial and industrial customers should contact the companies ... for specific bill impacts," the legal notice reads.
They indeed have been calling Eversource seeking information, according to Priscilla Ress, an Eversource spokeswoman.
"The reason we don't have the specific breakdown ... is because rates for these customers were last set 20 to 30 years ago and the techniques for rate design have changed," she said in an email Wednesday, in response to questions from The Eagle.
She said the utility works closely with big customers. In addition to fielding calls, Eversource has been contacting them in advance to explain its proposed rate changes.
In a filing this month with the DPU, an attorney for Eversource offered at least some sense of what electricity might cost for these big customers, many of whom spoke out at an April public hearing in Pittsfield.
Ress said public outcry over the proposed rate increase moved the company to pause, as the DPU reviewed its January request, and try again. That was spurred in part by complaints that the rate system penalized customers in Western Massachusetts, particularly the big commercial accounts.
"So we worked for a more fair and balanced way to collect money across the commonwealth," Ress said.
In its second proposal, Eversource customers in the eastern part of the state will see smaller decreases, or slightly bigger increases, she said. And commercial and industrial customers in the Berkshires "will get significantly smaller increases than originally proposed."
Though this week's legal notice avoids specifics, a company representative did sketch rough outlines earlier this month.
In a DPU filing June 1, Brendan P. Vaughan of the law firm Keegan Werlin LLP wrote that for an average large industrial customer, changes for 2019 would result in a total bill increase of 5.1 percent over 2017 costs, compared to an increase of 9.1 percent proposed in January.
"The alternative approach generally results in lower cost allocations to C&I customers in [Western Massachusetts], and therefore, reduced bill impacts," Vaughan wrote.
The change would relieve Onyx Specialty Papers of South Lee of the possibility of a 32 percent electricity rate increase. Instead, the increase, if approved by the DPU later this year, would rise 16 percent, according to Patricia Begrowicz, the company's president.
All 18 power customers in that category in the Berkshires would see the rate increase first proposed by Eversource cut by about half.
Because the utility filed its revised rate design proposal late in the process, the DPU has called for two near public hearings, one in Pittsfield and the other in West Barnstable. A July 26 hearing is also planned in Boston.
The local hearing will be held at 6 p.m. Aug. 1 in the Boland Theatre at Berkshire Community College, 1350 West St., Pittsfield.
People have until 5 p.m. Aug. 31 to file comments on the utility's revised rate design with the DPU. Comments should be sent to Marc J. Tassone, hearing officer, DPU, One South Station, Boston, MA 02110.
Whether Western Massachusetts is spared the rate increases Eversource outlined in January depends in part on reactions from customers across the state, including the larger NSTAR Electric Co. region. That eastern operation for Eversource has 1.2 million customers, compared to 209,000 in the former Western Massachusetts Electric Co. territory.
As the utility notes, its move to shift revenue between the two sides of its business "has the potential to change customer bill impacts."
As the legal notice makes clear, customers in the NSTAR region would be right to see that as more than a "potential" change.
In its revision, Eversource proposes to increase residential non-heating rates for customers in the Boston area using 525 kilowatt hours by $10.29 a month (a 9 percent increase) compared to the $9.08 (or 7.9 percent increase) it first identified.
While that rate rose, the monthly cost for the same type of customer in the Berkshires using 543 kilowatt hours of electricity would rise $9.78 (8.6 percent) under the revised rate design, compared to $11.51 (or 10.1 percent) announced in January — a saving of $1.73 a month.
But in the second year, rates in the Berkshires for those same customers would climb $1.54 a month instead of falling by 7 cents a month. That adjustment would add $1.61 back onto local rates, nearly erasing the first year's tempering in the size of the increase.
Though rates would differ between NSTAR and WMECO customers in 2018, the company, in a change, would make them uniform for 2019.
In this week's legal notice, Eversource restates that it needs to cover a $60.2 million operating deficit in the NSTAR region and a $35.7 million shortfall in the WMECO area.
Attorney General Maura Healey has cited the company's profitability in her efforts to oppose the rate increase request.
"It's time to return money to customers, not to raise their electric bills," she said at the April hearing in Pittsfield.
After public comment closes Aug. 31, the DPU will hold five days of evidentiary hearings on Eversource's rate design system. The regulatory agency has said it will rule on the expanded Eversource case in time for any proposed increases to begin Jan. 1.
Reach staff writer Larry Parnass at 413-496-6214 or @larryparnass.
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