Rep. Provost DPU Eversource Rate Testimony — File 203985

3 August 2017 Mark D. Marini, Secretary Department of Public Utilities One South Station, 5th Floor Boston, MA 02110 Re: Petition of NSTAR Electric Company and Western Massachusetts Electric Company, each d/b/a Eversource Energy, D.P.U. 17-05 Dear Secretary Marini, I write in opposition to the requested rate increase by Eversource, which is neither just nor reasonable. Over the next five years, Eversource proposes to raise rates almost 20% to generate $284 million, even though current rates are more than enough to cover costs and generate a generous return on investment. Eversource’s proposal would both disincentivize clean energy adoption as well as burden ratepayers with increased costs for the same basic services. The Eversource petition seeks a revised rate regime which includes higher base charges, less credit for net-metered customers, and a new billing structure which would reduce transparency for consumers. Residential customers and small business owners would be disproportionately disadvantaged by the rate increases, while large commercial and industrial customers would benefit from the new rate designs. We should be prioritizing system efficiency and rate fairness, not asking residential customers to subsidize commercial ones. Higher fixed charges and demand-based rate structures would burden residential customers not only with higher bills, but also with opaque pricing. Ratepayers will get no help managing their electricity consumption under demand-based rate regimes, since costs would depend on both amount consumed and aggregate market demand at any given time. Utilities in several states provide “smart meters” to help customers interpret electric demand and price signals. Though Eversource has no plans to install these efficiency cost-saving devices, it’s the kind of service it should be offering its beleaguered ratepayers. In addition to other burdens on residential ratepayers, Eversource proposes a monthly minimum reliability contribution (MMRC) which would discourage investment in solar energy. This rate change would increase fixed charges for net-metered customers who produce their own distributed generation power. This type of plan would make it costlier for residents and small

business to transition to sources of renewable energy which make our energy supply more robust. The Eversource proposal hinges on a broad rate design known as “performance-based ratemaking.” This structure is essentially a multi-year plan to increase rates without a formal petition to the Department of Public Utilities. While rate increases are typically contingent on company growth and consumer satisfaction, Eversource’s mechanism would not be linked to performance, energy efficiency, or any quantifiable benchmark. I echo the Attorney General’s recommendation to cap Eversource’s return on equity (ROE) at 8.875%, which is much more reasonable than the request for 10.5%. The average national ROE is 9.3%. Eversource’s proposal for a 10.5% ROE would make it the highest in the New England, and would deviate from the national trend of setting utility ROE downward. Massachusetts residents already pay some of the highest electricity rates in the nation. Eversource should not be allowed to burden ratepayers with higher costs without giving them better service in return. Switching to demand-based rate charges and higher fixed fees would hurt ratepayers, even as Eversource realizes higher than industry average profits. I respectfully request that the Department reject Eversource’s proposed rate hike since existing rates are more than sufficient to cover costs. Eversource’s proposal does not connect higher rates with better service. Without legitimate justification for their nearly 20% rate increase over 5 years, Eversource should lower rates, and design a revenue structure where customers and their desire for cleaner energy come first. Sincerely, Representative Denise Provost 27th Middlesex CC: Marc J. Tassone, Hearing Officer Cheryl M. Kimball, Keegan Werlin LLP Joseph W. Rogers, Assistant Attorney General