Correction: This story originally reported that the attorney general was to testify in Springfield Wednesday. In fact, her office will offer testimony at the DPU hearing, not the attorney general herself.
Massachusetts Attorney General Maura Healey testified in Pittsfield Monday at a Department of Public Utilities hearing. Healey is challenging a request made by Eversource to raise its electricity rates next year. WAMC’s Berkshire Bureau Chief JD Allen has more on how it will affect Western and Central Massachusetts customers.
The hike would mean a $96 million increase next year and $50 million annually for the next four years for about 1.4 million Eversource customers, if the request is approved by the DPU.
Senior Vice President and Chief Customer Officer Penni Conner represented Eversource at the hearing Monday in Pittsfield. Conner says the company is losing money, because it’s expensive to serve the area.
“The cost associated with serving our customers here in Western Massachusetts are greater than the revenues than we are collecting, associated with the rates that are in place,” Conner says.
Eversource has invested in renewable wind, solar and soon hydropower, too. The company extends miles and miles of electric lines across rural areas to service Western Massachusetts.
“Despite all of our efforts to reduce costs, we have needed to make capital investments to keep the distribution system and maintain service quality,” Conner says.
All told, Western Massachusetts customers would pay $36 million more next year and $8 million annually for the next four years.
“We know there is never a good time for a rate increase, and that no rate increase is welcomed by customers,” Conner says.
The hike would cost Western Massachusetts customers an extra $150 a year on average.
State Attorney General Maura Healey says that’s unacceptable, and many customers already struggle to pay their bills.
“When so many customers in Western Massachusetts are struggling to make ends meet and businesses in particular here in Western Massachusetts are trying to lower their energy costs to maintain and grow jobs, which is important to all of us in the state and not just important to people in Western Massachusetts, it’s time to return money to customers, not to raise their electric bills to benefit a highly profitable utility company,” Healey said.
State legislators, City of Pittsfield leaders, and representatives of Berkshire Medical Center, Berkshire Community College, several businesses and more than 100 residents echoed Healey’s testimony.
“We are frustrated and we are angry about this rate increase. And we are here to ask you to remember the people of Massachusetts,” Tricia Farley-Bouvier, Representative from the 3rd Berkshire District, says.
The lawmakers contend the rate hike is going to disproportionally affect Western Massachusetts.
Eversource subsidiary NSTAR, which services 1.2 million customers, will raise rates in Eastern Massachusetts, too. That will yield about $60 million in revenue for the utility company.
Basically, that means that the 209,000 customers who are served by Western Massachusetts Electric Company will pay one-third the value of the overall rate increase.
“Let us paint a picture for you of Berkshire County’s current economic hardship and population loss. Since 1990, our medium household income has grown significantly lower and slower than Massachusetts as a whole and nearby New York state, which is by the way just 8 miles down the road from here,” 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. Its workforce has dropped 11 percent in the past decade, partly due to the loss of manufacturing in the region.
Farley-Bouvier is concerned the utility company will use the rate hike to fill its stockholders’ pockets instead of improving service.
“The fact that this unabashed money grab is to happen at the expense of the working people of Berkshire County is obscene,” Farley-Bouvier says.
WMECo’s shareholders received a total return of 89 percent. Eversource also wants to continue to earn more than 10 percent return on equity, or ROE.
Healey says it’s the company’s right to request for a rate change, but not so exorbitantly.
“Every 1 percent reduction in the company’s ROE here will save WMECo costumers almost $4 million a year,” Healey says.
Healey will continue to oppose Eversource’s proposal at additional Department of Public Utilities hearings scheduled across the state.
