Western Massachusetts residents and lawmakers made it very clear at the state Department of Public Utilities’ public hearing Tuesday night in Pittsfield: Eversource’s proposed rate hike will not fly.
The auditorium at Berkshire Community College was sparsely filled Tuesday night, but the people who did attend said “No” to Eversource’s proposed rate hike.
The state Department of Public Utilities was allowing residents and lawmakers to weigh-in about the utility company’s proposal to phase-in a hike, seeking $96 million in January 2018, and $50 million annually for four years starting in 2019.
Director of Rates Ed Davis represented Eversource at the hearing, and said supplying Western Massachusetts with electricity is expensive.
“Eversource is not changing its overall rate request. We filed this request back in January because we are currently operating at a revenue deficiency costs. This means costs that are occurring to serve customers are greater than the revenues we are collecting through rates.” Davis says.
Davis says the rate hike will cover existing expenses like upgrading the region’s electric grid and various renewable energy initiatives.
Opponents say the hike unfairly burdens residents and businesses in Berkshire County, who would pay more than one-third the value of the overall rate increase – $36 million in 2018. Average customers would pay roughly $150 more a year.
“The question raised at hearings was: ‘Why can’t this be better balanced between east and west.’ So we have worked to achieve what we believe is a more balanced solution between the two areas,” Davis says.
In a June filing, Eversource decided to cut back on the share Western Massachusetts customers will pay.
The adjustment would still mean an increase for ratepayers, and Eversource would still make $96 million more next year, but the rate increase would be more evenly shared between Eversource subsidiary NSTAR, which serves 1.2 million customers in the east, and subsidiary Western Massachusetts Electric Company, which serves 209,000.
“What we have changed with the alternative rate design is the way we will collect the approved increase from individual customer classes,” Davis says.
As it stands, set increases will differ from customer to customer, depending on income and whether a house’s service includes heating.
Customers could pay between 3 and 11 percent more next year.
Advocating for customers were the Attorney General’s office, business owners, Pittsfield Mayor Linda Tyer, town elected officials from Lee and Lenox, and the Berkshire state delegation, minus State Representative Paul Mark.
State Representative Tricia Farley-Bouvier of Pittsfield echoed fellow Democrat Attorney General Maura Healey, who recently called on Eversource to reduce its rates.
“The overall increase is far too much for ratepayers, and Eversource, its executives and its shareholders, are protected far too much with this proposal,” Farley-Bouvier says.
State Representative Smitty Pignatelli, of the 4th Berkshire District, says the plan benefits stockholders rather than ratepayers. WMECo’s shareholders received a total return of 89 percent.
“I don’t want to see people like my 93-year old parents put in peril because they can’t pay their electric bill,” Pignatelli says.
Farley-Bouvier says a 10.5 percent return on equity is too high – especially for a company that pays its executives a hefty wage.
“James Judge, President and CEO, makes almost $25,000 per day, which is not that much different than the per capita income of the residents of Berkshire County per year,” Farley-Bouvier says.
Berkshire County’s average household income is 7 percent lower than the national average and 26 percent lower than the Massachusetts average.
“The company, its shareholders, they’re are getting along just fine, just fine without putting additional burdens on we the residents, the businesses and the municipalities of Berkshire County. And I can tell you: we are not getting along just fine,” Farley-Bouvier says.
State Senator Adam Hinds says a rate hike would keep families from settling in the region; Berkshire County has experienced a drastic population decline.
“And as we try to right this ship, we don’t even have the basic infrastructure to get us back on our feet,” Hinds says.
Pignatelli says the proposed rate hike has prompted businesses to flee, too.
“This rate increase will hurt them and their ability to grow and provide jobs to Berkshire residents. They could hire more people today, but are very hesitant to do that because of this proposal,” Pignatelli says.
If the hike is approved, opponents say, cash-strapped municipalities like Pittsfield would take the hit. The city would pay $736,000 more next year, which means residents would pay more to keep the city’s lights on and their own.
