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Editorial: We simply cannot afford another Eversource rate hike

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Friday, April 21, 2017

There are so many ways that Eversource’s proposed western Massachusetts rate hike of 10 percent for homes and as much as 18 percent for businesses feels unfairly burdensome.

The typical residential bill would increase about $11.64 a month, roughly 10 percent in 2018. That money would help the electric utility address what it calls a “revenue deficiency” of $35.7 million in western Massachusetts, which it says was caused by investments in maintaining and modernizing its distribution system — for the benefit of its customers.

The rate increase would cover delivering electricity to customers over local power transmission lines, and include metering, billing and other customer services. Eversource has about 215,000 customers in its western Massachusetts service area, which includes the central portion of Franklin and Hampshire counties. It has about 1.2 million in eastern Massachusetts, where it wants a 7 percent hike, or $8.45 a month.

There’s the first rub. The utility calculates its rates separately for the densely populated east and rural west. So, the more populous, financially better off east spreads its costs over a larger customer base, driving down its per-customer increase, while the west has more miles to cover and fewer customers to share the cost. The result: the poorer rural customers who can least afford it get stuck with higher bills.

That has led several critics to suggest the state should make Eversource calculate the rate increase on a combined east-west customer base, which would lower costs in this area. That makes sense, and a point that we hope state regulators are hearing.

Attorney General Maura Healey has vowed to fight the rate hike, telling the Department of Public Utilities, “When … businesses, in particular here in western Massachusetts, are trying to lower their energy costs to maintain and grow jobs … it’s time to return money to customers, not to raise their electric bills to benefit a highly profitable utility company.”

Edward P. Champagne, manager of engineering at Turners Falls Paper, wrote to the DPU, “This puts local industry at a competitive disadvantage when compared to manufacturers located in other areas of the country with lower costs.”

The proposed increase, Champagne wrote, is unreasonable and “not easily absorbed or sustainable without impact to our employees and customers.”

And then there are the people trying to go green with solar panels. Beyond the proposed rates adding $11.64 per month to the average 550-kilowatt hour residential bill for residential customers in the west as of Jan. 1, Eversource is proposing a peak “demand charge” for solar customers, based on how much electricity they use in their highest 15-minute period in the month.

Eversource says the charge would help it cover the costs of providing solar users with a grid they can use as a battery for storing excess power and as backup.

And, Eversource seeks to move to flat rates per kilowatt hour of usage rather than having higher rates for bigger users. Critics say those stepped rates encourage customers to conserve.

On the profit side of the ledger, Eversource is seeking 10.5 percent shareholder profits, according to the Attorney General’s Office. Healey says this is higher than other utilities, which see profit rates closer to 9 percent. Between 2010 and 2015, Eversource’s shareholders of common stock received a cumulative total return of 89 percent, the AG’s office states. Yet, Eversource ratepayers have continued to pay higher distribution rates than similarly situated National Grid customers, Healey said.

On Wednesday, Greenfield will host the DPU’s final public hearing on the proposed rate case at 7 p.m. in the auditorium at Greenfield Middle School.

Healey, local legislators, businesses, homeowners and consumer and solar advocates have raised legitimate concerns about this proposal. We hope that coalition will turn out in force to articulate the arguments again for the state regulators who we hope will very closely scrutinize this unreasonable request, how it was formulated — and the debilitating impact it could have on life and commerce here.

Western Massachusetts residents literally can’t afford the shock such an increase would send through the regional economy.