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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.

Eversource is required by law to establish new distribution rates through a rate review every five years.

Eversource Passes Along Corporate Tax Break to Customers

Along with approving the costs associated with providing service and supporting our customers’ growing electricity needs, the DPU accepted Eversource’s proposal to voluntarily pass along a $47.6 million (Eastern Massachusetts) and $8.3 million (Western Massachusetts) tax reduction to our customers.

This change resulted from a new federal tax law. Eversource is the first utility in the nation to pass the tax reduction to its customers.

The combined result of the rate review and the change in tax laws helped to reduce the overall price impact to our customers, while allowing us to continue investing in reliability improvements and the safety of our system – helping our customers and economic development in the region.

Customer Benefits

Customers will see the following benefits:

  • Continued investments in reliability and storm response.
  • Increased accessibility to emerging, clean energy technologies such as electric vehicles and electric storage.
  • Rates designed to encourage more energy efficiency.
  • An increase in our Discount Rate for lower income customers to 36 percent.
  • Simplified rate classifications for residential customers that are easier to understand, eliminate outdated provisions and standardized for our customers across the state.

Public Hearings

The DPU held 10 public hearings to receive comment on the Distribution Rate Review at locations across Eastern and Western Massachusetts.

The public hearings began March 22, 2017 with the last meeting held on April 26, 2017. 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 2017 to receive comment on the revised rate design proposal. These hearings were held in Boston, Pittsfield and West Barnstable.

Frequently Asked Questions

What is the overall impact to my bill?
Residential customers will see changes in their rates as reflected in the charts below. Charges are based on the difference in both Delivery and Supply charges between January 2018 and February 2018 and reflect the Eversource Basic Service Supply Rate.

The pricing changes that you will see depend on the rate you are billed on and how much energy you use.

Western Massachusetts
Residential Customers
Rate Classification Typical
Monthly
Use (kWh)
Change Percent Change
Space Heating Assistance (R-4) 750 - $4.61 -4.4%
Non-Heating Assistance (R-2) 500 - $1.53 -1.9%
Non-Heating (R-1) 500 $2.39 1.5%
Space Heating (R-3) 750 $4.90 4.0%

More detailed rate information is available in the Rates & Tariffs section of the website.

When do new rates take effect?
All customers will see a difference in the rate they pay and some residential customers in Eastern Massachusetts will see new rate classes.  Residential customers will see rate changes and new rate classifications beginning February 1, 2018.

Business customers will also see rate changes effective February 1, but will not see new rate classifications.

My rates changed in January. Why are they changing again in February?
The rate change in January reflects the change in the cost of energy.  This cost is direct pass through of what Eversource pays to suppliers for your energy. Eversource makes no money on this portion of the bill.

Additionally, certain costs are reconciled and recovered annually each January. These changes account for continued investment in Eversource’s infrastructure, state mandated programs, energy efficiency and other costs outside of our control – such as storms.

The changes taking effect on February 1 relate specifically to our electric distribution rate review with the DPU. 

Why did the customer charge change?
The customer charge was standardized to $7 a month for all residential customers across Massachusetts.

For most customers this is less than a $1 increase per month, with many heating customers seeing their customer charge decrease.

Non-heating customers in the Plymouth area, New Bedford area, Cape Cod and Martha’s Vineyard will see an increase of approximately $3 a month. This is the first customer charge change for these customers in 25 years. 

This charge reflects the cost of providing the service wire to the home, meters, billing and other administrative support.

How did the corporate tax rate cut impact my bill?
In December, the DPU accepted Eversource’s proposal to voluntarily pass along $47.6 million (Eastern Massachusetts) and $8.3 million (Western Massachusetts) in tax savings to its customers.

The combined result of the rate review and the change in tax laws helped to reduce the overall price impact to our customers, while allowing us to continue investing in reliability improvements and the safety of our system – helping our customers and economic development in the region.

What are the customer benefits of the rate review?
In addition to on-going reliability enhancements, the rate review will help Eversource get the lights back on quicker during bad weather events, support emerging and clean energy technologies. 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.

Additionally, new simplified residential rate classifications will be easier to understand and consistent across Eversource’s Massachusetts service territory.

How will communities served by Eversource for electricity benefit? 
This rate review will enable Eversource to continue to make important safety and reliability investments in the system. It will also allow our communities to take advantage of innovative offerings such as electric vehicle infrastructure.

And, of course, Eversource will continue to work side-by-side with communities during storms to keep the community safe and for efficient restoration. 

It’s also important to note that our communities will be able to continue to take advantage of our award-winning Energy Efficiency programs and services to help them save energy and money. 

We’ll also continue to offer assistance to those community members who are facing financial difficulties through our Discount Rate, New Start program and other financial assistance programs.  We also plan to continue our long tradition of supporting charitable and civic organizations across our service territory.

How has service to customers improved?
Eversource has continued to make investments in the distribution system for improved customer service.  Since 2010, Eversource customers in Eastern Massachusetts have experienced 24 percent fewer outages, and when outages do occur, they are 16 percent shorter in duration. In Western Massachusetts, customers have experienced 43 percent fewer outages, and when outages do occur, they are 23 percent shorter in duration.

Eversource has made significant investments in its distribution system, while maintaining O&M costs at a lower rate than inflation and compared to its peer utilities.

Can customers continue to count on Energy Efficiency programs and services?
Yes.  Our customers can continue to take advantage of our Energy Efficiency programs and services – offerings that have helped make Eversource the #1 Energy Efficiency Provider in the Nation (according to Ceres).  Customers can always find more information about our Energy Efficiency offerings in the 'Save Money & Energy' section of the site.

Why is Eversource changing its rate classifications?
As part of the rate review, Eversource consolidated many different residential rate classifications across our Massachusetts service territory to four. The new, simplified rate classifications will be easier to understand for customers, standardized across Massachusetts, and eliminate outdated provisions.

New rate classifications standardize Eversource’s residential rate descriptions, eligibility, definitions and billing processes.

What types of rate classifications were eliminated?
No rate classifications were eliminated in Western Massachusetts.

In Eastern Massachusetts, optional time of use, controlled water heating and seasonal rate options were eliminated for residential customers.

Optional time of use rates were eliminated because the DPU is investigating new options for customers. Controlled water heating rates became obsolete when water heater controls were removed when automated meters were installed. The elimination of seasonal rates lowered the distribution rate for these customers.

In Western Massachusetts, seasonal provisions will be eliminated. The rate review also ended a surge protector program in Western Massachusetts, as the commercial market for similar products has matured with higher quality products now available.

How will Discount Rate customers be impacted?
Discount Rate customers will see their total discount increased to 36 percent. As a result, low income customers throughout Massachusetts will see a decrease in their monthly bills. 

How did the merger of Northeast Utilities and NSTAR impact these rates?
It has greatly benefited customers across the state.  The rate review reflects $30 million in savings from the merger for Massachusetts customers.

How will the rate proposal affect customers enrolled on the company’s net metering option, and how about new customers to net metering? 
Existing net metered customers are grandfathered on their existing rate. New net metering customers with an in-service date on or after December 31, 2018 will be subject to a demand charge.

This new charge helps ensure we collect the costs to serve distributed generation without other customers subsidizing those choosing net metering options.

It also helps Eversource recover the cost to serve net metering customers. We developed the demand charge using a cost of service model that established the minimum cost to maintain system reliability. 

The company is working on a comprehensive education plan to help customers calculate their demand.

It is important to note, this is a prospective charge, existing net metering customers will not receive the new demand charge. 

Can net metering customers still receive net metering credits?
Yes, customers would still receive credits under the proposed net metering rate design.

Why is Eversource proposing performance based rate (PBR) calculations instead of calculating rates using a traditional capital tracker mechanism?
The DPU approved a PBR model, proposed by Eversource because it enables Eversource to continue to make investments in our system and improve service to customers.

PBR establishes key performance metrics related to customer service, safety and reliability service quality benchmarks that Eversource would need to meet before the company could collect revenues. 

Eversource has demonstrated that our cost containment efforts are rigorous and we have held operating and maintenance expenses and administrative costs flat since our merger in 2012, while improving service to customers. 

Additionally, our costs have risen at a much slower rate than other peer utilities and less than the level that would exist if growth was consistent with inflation.  Since 2005 our annual level of expenses has increased less than 1 percent per year on average, while inflation during that time period was nearly 2 percent, and the cost trend of our peer group was nearly 3 percent.  

As a result, PBR rate making encourages Eversource to continue to manage its business as rigorously as it does today, and more importantly, to be able to pass those savings on to customers. 

How does Eversource determine its proposed distribution rates?
Eversource distribution rates are developed by taking the company’s revenue requirements (as approved by the DPU), and allocating it across all of the residential and business customer groups based on each group’s usage of the distribution system and the cost to serve them.

The final rate is calculated based on the above allocation and its customers’ historic use and demand.

What options are available for customers to lower their energy usage?
Both residential and business customers can take advantage of the energy efficiency programs at Mass Save as well as Eversource's Energy Savings Plan. Business customers can also have the option of using Energy Profiler Online.


Additional Resources: