BOSTON—On Friday, January 5, 2018, the Massachusetts Department of Public Utilities (MA DPU) issued an order on a major rate case involving Eversource, the Commonwealth’s largest utility, which provides service from Boston to the Berkshires. In Docket 17-05, the DPU rubberstamped a range of proposals by Eversource including demand charges for new residential solar projects starting on December 31, 2018 and the elimination of optional time-of-use rates for residential customers. Acadia Center is an intervenor in the rate case and opposed these proposed changes, along with numerous other parties, as harmful to consumers and counterproductive to incentives for consumer-friendly, clean energy technologies that should be the cornerstone of a modern energy system: energy efficiency, storage, electric vehicles, and rooftop solar.
“In order to achieve a cleaner, modern, more efficient and consumer-friendly energy system, Massachusetts needs to step up its game and embrace smarter electricity rates and more customer control. Rate reform should provide customers with the right tools, including understandable incentives to reduce energy use and invest in clean energy technologies,” said Daniel Sosland, president of Acadia Center. “By eliminating optional residential time-of-use rates and approving complicated demand charges, the Department is moving backwards instead of forward.”
“Demand charges” are charges based on the highest peak hourly usage by a customer over the course of a month, regardless of when that electricity is used. Given the lack of sophisticated metering in Massachusetts, there is no way for consumers to know what time this peak occurred and what actions could be taken to manage these charges. As a result, consumers will be paying the highest possible rate for this charge without being provided the information needed to understand the cause of these costs. Importantly, because an individual customer’s peak usage does not necessarily correspond to peak demand across the utility’s electricity system, consumers are not being provided incentives to reduce energy usage in a way that could benefit the whole electricity system. The result is that opportunities to reduce peak demand—which drives costs for the system at large—will be lost. Acadia Center co-authored a paper on issues with demand charges in 2016.
“Acadia Center and other intervenors in the Eversource rate case made a detailed case that demand charges are not understandable by small customers and are inefficient because they are not tied to the peak times that drive costs,” said Amy Boyd, Senior Attorney and lead counsel for Acadia Center in the rate case. “The Department has chosen to move forward despite these issues. In addition, elimination of residential time-of-use rates harms efforts to reduce the costs associated with peak usage across the system through energy efficiency and other investments made by customers.”
Mark LeBel, Staff Attorney and expert witness in the rate case, said: “Imposition of demand charges on new residential solar customers starting in 2018 is a mistake. The Department has taken an unreasonable approach to addressing any issues with net metering and ignored Acadia Center’s proposals for more gradual reforms over time, including a distribution reliability charge that could be implemented with current metering.”
Amy Boyd, Senior Attorney
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Mark LeBel, Staff Attorney
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Krysia Wazny, Communications Director
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