Public rips Eversource’s requested $300M rate increase at Pittsfield hearing

For the Gazette
Published: 4/11/2017 12:12:08 AM

PITTSFIELD — Disproportionate. Exorbitant. And greedy.

Those were among the words used, again and again, at a public hearing Monday by residents and business owners alike to characterize a proposed rate increase by electric utility Eversource. They asked the state to reject its request.

Eversource wants state Department of Public Utilities approval to raise its rates by more than $96 million next year and $50 million annually for the next four years, according to Attorney General Maura Healey. If approved, the proposed increase would add $11.64 to the average monthly bill for residential customers who live in the west and $8.45 for those living in the east as of Jan. 1, 2018, according to Eversource.

For Eversource’s commercial and industrial customers, the proposal would increase electricity rates up to 37 percent in western Massachusetts. The rates for businesses in the east would decrease.

Eversource officials have said the proposed increase is needed to offset the company’s operating deficit of nearly $96 million.

The DPU held a public hearing on the proposed increases in Pittsfield Monday night, one of several it is hosting statewide on the issue.

It was standing room only inside the Berkshire Athenaeum auditorium, where about 275 people filled it and an adjacent room.

Exacerbating the divide

Jane Winn of Pittsfield spoke of the diverse interests of those at the hearing. Head of the Berkshire Environmental Action Team, Winn pointed to fellow environmentalists, social justice advocates, business owners, state and local elected leaders and more.

Different though they are, she said, they all agree on one thing: “We are all united against this rate hike. Please take us into consideration,” she said.

Many who spoke said they were skeptical of the company’s reasons for the proposed increase. They also said the increase is unfair to customers here, who on average earn less annually, compared to the more affluent eastern part of the state.

“We are smaller, we are older, we are sicker and we are poorer,” state Rep. William “Smitty” Pignatelli, D-Lenox, said. “Those are four facts that we cannot dispute about Berkshire County.”

Electricity rates for commercial and industrial customers in Massachusetts are among the highest in the country, behind Alaska, Connecticut and Hawaii.

The proposed increase would add between $41,000 and $1 million to the bottom line of commercial customers, according to testimony given to the DPU Monday.

Pittsfield Mayor Linda M. Tyer said the city’s bill would increase $1.3 million.

“This will undermine growth, threaten job security, and jeopardize the economic prosperity of every citizen,” she said.

Brendan Ronayne, senior finance manager at Crane Currency, said the company is in the middle of a five-year, fixed-rate contact with the United States government to make its currency paper. He said it anticipates paying $550,000 more to Eversource, while the electric company would receive “excessive” returns.

Pat Begrowicz, owner of Onyx Specialty paper in Lee, stressed the disproportionate nature of Eversource’s proposed increase.

She said the company would generate $2.2 million from the 18 largest ratepayers in western Massachusetts. Meanwhile, 112 similar companies in the east will see their rates decline.

“This exacerbates the divide between east and west,” she said.

Shortfall cited

Attorney General Maura Healey, who is opposed to Eversource’s rate request, told the DPU that residential customers in western Massachusetts are struggling to make ends meet, and businesses are working hard to remain competitive and grow.

“It is time to return money to customers, not to raise their electric bills to benefit a highly profitable utility company,” Healey said.

Eversource says it is facing a $35.7 million operating deficit in the west and a $60.2 shortfall million in eastern Massachusetts.

Penni Connor, Eversource senior vice president and chief customer officer, attributed the company’s shortfall to capital investments the company made to maintain infrastructure and services to customers.

Of Eversource’s 1.4 million Massachusetts customers, 209,000 live in the western part of the state and 1.2 million live in eastern Mass.

Although the operating deficit in eastern Massachusetts is larger, the impact of the proposed rate increase would be greater in western Massachusetts because the rate hike would be absorbed by fewer customers here.

But Connor said Eversource is reviewing the consolidation of its distribution rates to determine if that would lessen the impact on customers in the western part of the state.

Connor also asserted that customers here have received millions of dollars in credits in the past five years because of revenue decoupling.

If the company was not mandated to give those customer credits, Eversource would have used that money “to avoid rate cases like this one,” she said.

The DPU began holding hearings on the proposed increase last month and several more are scheduled this month. It will hold evidentiary hearings at the DPU in Boston in June.

Carrie Saldo is a reporter for The Berkshire Eagle.

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