Eversource To Pass On Tax Law Savings To Customers
The corporate rate under the new federal tax law will save Eversource’s western Massachusetts subsidiary millions of dollars. What does it mean for local ratepayers?
Spokesperson Priscilla Ress says Eversource is ready to scale back its rate increase, which the state Department of Public Utilities OKed in November.
“These changes will be significant for our customers,” Ress says. “And it is going to be offering them rate relief that has rarely been possible in today’s operating environment.”
The DPU had decreased Western Massachusetts Electric Company’s request for a $34.7 million increase by 30 percent.
Kevin Conroy, a former state deputy attorney general under Martha Coakley, told WAMC in December it wasn’t enough, and says the rate hike will disproportionally impact western Massachusetts’ 209,000 ratepayers.
“And so I am worried about what this will means for the average ratepayer in western Mass. I am also worried about what this will means for the average commercial business owner, especially industrial business owner, in western Mass.,” Conroy says. “I am less concerned about what this means for eastern Mass. That has a very sizable rate base.”
In a December filing with the DPU, Attorney General Maura Healey’s office requested the department reopen the case and lower the rate hike for WMECO customers to $13 million to reflect the new tax rate.
Ress says Eversource supports a reduction.
“So right now the company is asking the DPU to both recalculate the approved revenue requirements as well as to incorporate the reductions that are due because of the modification of the federal income tax rate for corporations going from 35 percent to 21 percent, effective January 1st,” Ress says.
The AG’s office estimates WMECO will save more than $8 million a year under the new tax law.
State Senator Adams Hinds says western Massachusetts has high electricity costs, impacting how Eversource customers do business. The Pittsfield Democrat says those residents stand to benefit the most.
“When you take the big picture, if the intent of these tax breaks were to in the end help residents through economic stimulus or otherwise, it’s time to call their bluff and say, ‘Let’s make sure this goes directly to protecting the consumer and residents,’” Hinds says.
In a statement, Healey said: “This tax bill is being paid for by the people of Massachusetts, so the money should go back in their pockets.”
The AG’s office petitioned the DPU in December to recalculate rates for all major electricity, gas and water companies to reflect the lower corporate tax rate. Healey claims to be the first attorney general in the country to call for “across-the-board cuts” to utility rates.
New distribution rates are expected to kick in February 1st. Ress says customers will see reductions immediately.
“We expect to have the results of the recalculation – a full evaluation – by our tax department to figure out the exact amount that is going back to our customers,” Ress says.
In its filing Thursday, Eversource proposed to lower its existing rates for NStar Electric customers by $35 million and reduce WMECO’s rate hike to $16 million, instead of the $25 million approved by the DPU in November.
Attorney General Healey says she’s pleased Eversource supports giving back to its customers, but the AG’s office has also been challenging the DPU’s approval of a 10 percent shareholder return – which she calls exorbitant. Eversource’s Ress says:
”That’s sort of a story for another day,” Ress says.