Eversource Granted High Profit Margins, Automatic Annual Rate Increases, and Detrimental Charges for New Solar Customers
57 Consumer, Clean Energy, and Community Organizations Call on State Leaders to Address Counterproductive Decisions
BOSTON — Today, Acadia Center, Health Care Without Harm, MASSPIRG, Vote Solar, and 53 other organizations released a joint statement pointing to serious concerns over decisions by the Massachusetts Department of Public Utilities (DPU) in Eversource’s recent electricity rate case. These decisions are inconsistent with the consumer-friendly clean energy future that Massachusetts is striving for. The 57 organizations bringing forward these concerns come from many different perspectives, including low-income and ratepayer advocates, environmental, health and clean energy public interest organizations, solar advocates, and clean energy businesses.
“Massachusetts is embracing many innovations on clean energy, including energy efficiency and offshore wind, that will boost the Commonwealth’s economy, benefit consumers, improve public health and reduce greenhouse gas emissions,” noted Daniel Sosland, President of Acadia Center. “Unfortunately, in four important ways, the DPU’s decisions in Eversource’s rate case represent a significant step away from embracing a clean energy future. Instead, these DPU decisions provide incentives for the company to invest in outdated and expensive energy infrastructure, reduce customer control, and impose significant unnecessary costs on consumers.”
Two of these decisions, unnecessarily high profit margins (known as the return on equity) and automatic annual revenue increases going forward, could collectively cost ratepayers an extra $460 million over five years. The other two decisions, unprecedented new demand charges on new residential solar customers and the elimination of optional residential on-peak/off-peak rates, would move away from electricity rates that are efficient and consumer-friendly.
“Hospitals typically have very small margins, so every unnecessary penny per kWh for Eversource means a lot less money for healing patients,” said Paul Lipke, Senior Advisor for Energy and Buildings at Health Care Without Harm. “Unless addressed, Eversource’s rate changes also increase pollution and shift costs from energy to health care. This conflicts directly with efforts to constrain the Commonwealth’s health costs, and at a time when households already spend six times on health care what they spend on energy. We can and must do better.”
“The Commission has decided to effectively raise costs, remove value and reduce customers’ understanding of and control over bills by approving Eversource’s new solar demand charge,” said Nathan Phelps, Regulatory Director for Vote Solar. “This decision is out of step with Massachusetts laws to encourage the state’s transition to a clean and reliable electricity system, and out of step with the DPU’s own prior leadership ensuring that solar customers are treated fairly for the local power they generate. We urge the Legislature and the Governor to reject this decision and reinstate Eversource customers’ right to lower their own utility bills with rooftop solar, protect the thousands of solar jobs serving our state, and deliver on the Commonwealth’s commitment to building a clean energy economy.”
“For many of us, our electricity bills are a significant monthly expense, and we rely on regulators to make sure utility companies like Eversource don’t overcharge ratepayers or adopt pricing practices that are deceptive or unfair,” said Deirdre Cummings, MASSPIRG’s Consumer Program Director. “In this case, the DPU has approved Eversource’s new pricing schemes that will result in hundreds of millions in excessive charges; while at the same time, Eversource has made it harder for consumers to monitor their electricity use and reduce their bills.”
“Residential on-peak/off-peak rates should be used as a key tool to manage peak demand. Historically, these have been underutilized because the utilities do not publicize them and make them difficult to sign up for,” said Mark LeBel, Staff Attorney for Acadia Center. “Instead of optimizing these rates and making them easier to access, the DPU let Eversource eliminate them.”
The decision on the return on equity is currently being appealed to the Massachusetts Supreme Judicial Court by Attorney General Maura Healey, and the decision on demand charges for new residential solar customers is being appealed by Vote Solar and other parties. The decision on demand charges is the subject of a bill recommended favorably by the Joint Committee on Telecommunications, Utilities, and Energy at the Massachusetts legislature, and a requirement for optional on-peak/off-peak rates is included in several different bills. The DPU recently denied the Attorney General’s motion for reconsideration on the automatic annual revenue increases.
Mark LeBel, Staff Attorney
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Janice Gan, Public Engagement and Communications Associate
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