Electric Distribution Rate Review
At Eversource, we are proud of the highly reliable service we provide to residents, businesses, and communities in Massachusetts, and the leadership role we take in preparing for Massachusetts’ energy future.
Delivering on these commitments requires significant and sustained investments in our system, which is why Eversource filed a rate review in January 2017 with the Massachusetts Department of Public Utilities (DPU).
The filing enables Eversource to continue to provide superior service, support our customers’ growing electricity needs into the future, boost electric innovations such as electric vehicles, and facilitate customers’ interconnections to our grid using clean energy technologies.
On June 1, 2017, Eversource filed a revised rate design proposal with the DPU that shifts revenues between Eastern and Western Massachusetts as compared to the original proposal. Increases to individual customers will vary based on location, rate, and amount of electricity used.
The number of service interruptions on our system have steadily declined
in past years as shown in the above graph. The average length of time
of the interruptions has also decreased.
Why is Eversource Requesting A Distribution Rate Review?
Eversource is committed to investing in reliability improvements and the safety of our system. It’s not only important for our customers, but also for the economic development of the region. Massachusetts law requires utilities to conduct a rate review and update distribution rates every five years.
This differs from energy supply rates – or Basic Service rates – that change each year in January and July. New rates will also help Eversource be prepared even more effectively for future storms. Our rate review details components of a $36 million gap between expenses and what is currently collected in rates.
If approved by the DPU, customers would see the following benefits:
- A smarter, more technologically advanced energy system.
- Ongoing reliability enhancements and system automation.
- Increased accessibility to emerging, clean energy technologies such as electric vehicles and electric storage.
- Further economic growth in Massachusetts.
- Easier to understand and more consistent rate classifications.
Rate Review Process
In Massachusetts, a rate review is the regulatory proceeding conducted by the Department of Public Utilities (DPU) to review a utility’s proposal to adjust rates.
A rate review goes through the following steps:
- The utility files a Notice with the DPU indicating that it intends to file a rate review. The utility can file 30 days after this notice. Eversource filed its Notice on December 9, 2016.
- The utility determines the revenue deficiency, which is the amount of money the company is collecting in rates versus the amount of money that is required for its investments and Operation & Maintenance (O&M) costs.
- A utility conducts a “Cost of Service Study” (COSS) to determine costs to provide service to different types of customers, such as residential and commercial/industrial. Eversource’s COSS allocates costs across unique customer rate groups.
- A detailed rate review is filed with the DPU. This filing proposes rate adjustments by customer type, using the COSS. Eversource filed a detailed rate review with the DPU on January 17, 2017.
- DPU issues a notice for Eversource’s rate review and schedules public hearings to gather feedback on the rate review proposal.
- DPU conducts a comprehensive review of the rate review and issues a ruling within 10 months. The review process includes several days of hearings. If approved, any new Eversource electric rates would take effect in January 2018.
The DPU scheduled 10 public hearings to receive comment on the Distribution Rate Review at locations across Eastern and Western Massachusetts.
The public hearings began March 22 with the last meeting held on April 26. Locations included in Natick, Plymouth, Boston, Pittsfield, Cambridge, Springfield, Barnstable, Tisbury, New Bedford and Greenfield.
Three additional public hearings were held in July and August to receive comment on the revised rate design proposal. These hearings were held in Boston, Pittsfield and West Barnstable.
Frequently Asked Questions
What is a rate review?
In Massachusetts, a rate review is a regulatory proceeding to independently review a utility’s proposal to adjust distribution rates by the Department of Public Utilities (DPU). The process has a number of steps and can last up to 10 months from the filing of Eversource’s proposal.
What are the customer benefits of the rate review?
In addition to on-going reliability enhancements and the further automation of our electric distribution system, the rate review will help Eversource support emerging, clean energy technologies and the further integration of customer-owned distributed generation. This is important not only to our customers, but the economic development of the region.
It will allow us to support electric vehicle infrastructure for charging stations across the state, helping meet Massachusetts’ aggressive clean air goals.
Eversource will also pilot a potential electric storage program, placing large battery storage installations created with cutting-edge technology on our distribution system. The stored electricity would be used during peak demand periods, increasing reliability.
Additionally, new simplified rate classifications will be easier to understand and consistent across Eversource’s Massachusetts service territory.
When will the DPU hold public meetings and hearings?
After receiving Eversource’s rate proposal, the DPU scheduled public meetings to gather feedback. The meetings were held in April and May in 10 locations across Massachusetts.
Information about meetings and hearings was posted on Eversource.com and customers were notified via their their bill and ads in local newspapers.
What is the overall impact to my bill if the new rates are approved?
The average residential customers would see an increase of about $9.78, or 8.6 percent, a month beginning in January 2018. Increases for customers may vary depending on rate and the amount of electricity used.
If approved, when would new rates take effect?
A decision on the rate review will be issued in late December 2017. Customers will see rate changes beginning January 1, 2018.
It seems like my rates are adjusted regularly, why is this?
Massachusetts law requires utilities to solicit for energy supply every six months, thus the energy supply rate changes on your bill each January and July. The filing is for the distribution charges on your bill. In recent years, Eversource’s distribution rates have remained stable due to efficient cost management while electric reliability has improved.
Why is Eversource changing its rate classifications?
As part of the rate review, Eversource proposed to consolidating different rate classifications across our Massachusetts service territory. The new, simplified rate classifications will be easier to understand for customers, standardized across Massachusetts, and eliminate outdated provisions.
New rate classifications seek to standardize Eversource’s rate descriptions and eligibility, time-of-use periods and demand definitions.
How will Discount Rate customers be impacted?
Eversource is proposing to increase discount levels from between 19.7 and 32 percent to 36 percent.
Why are Eversource’s rates different for customers in Western MA and Eastern MA?
While Eversource will be consolidating rate classifications and terms and conditions across the state, rates will continue to be different for general service and street lighting customers in Eastern vs. Western Massachusetts. This difference is a result of historical differences between operating companies Western Massachusetts Electric and NSTAR.
How will the rate proposal affect customers enrolled in net metering option? How will it impacted new net metering customers?
Eversource is proposing a net metering rate design that includes a monthly minimum reliability contribution (MMRC) for new net metering customers.
In an effort to be fair to all customers, the MMRC ensures that we collect the costs to serve distributed generation/net metering customers without other customers subsidizing them. We developed this rate design using a cost of service model.
Existing net metered customers are grandfathered from the MMRC. Eversource is proposing to have new MMRC rates apply for new net metering customers with an in-service date on or after January 1, 2019.
Are there other components of your net metering rate design?
Yes, a customer charge and volumetric charge would apply to customers.
Can net metering customers still receive net metering credits?
Yes, customers would still receive credits under the proposed net metering rate design.