For Immediate Release - August 17, 2010

Attorney General Martha Coakley's Office Opposes Western Massachusetts Electric Company's Proposed Rate Hike

BOSTON - Attorney General Martha Coakley announced today that she will oppose the proposed $28.4 million rate hike sought by Western Massachusetts Electric Company (WMECo). If approved by the Department of Public Utilities, the rate request filed by WMECo on July 16, 2010 would cause a residential customer's bill to increase $5.86 per month, a 25% increase in the distribution portion of a customer's bill or 7% overall. The rate increase is proposed for February 1, 2011.

"WMECo's requested distribution rate increase is excessive," said Attorney General Martha Coakley. "Residents and business in Western Massachusetts are already paying high energy costs and should not be forced to pay increased costs in this economic downturn."

The Attorney General's Office has several concerns regarding WMECo's filing and the impact it will have on the electric customers in Western Massachusetts including:

  • In addition to seeking increased revenues of $28.4 million, the Company seeks to shift more risks onto ratepayers by requesting recovery for costs incurred for: (a) Capital Expenditures, such as replacing the infrastructure that it has allowed to deteriorate over the years; (b) Inflation Allowance; (c) Bad Debt and Other Uncollectibles.
  • If approved, WMECo's proposed rate plan will result in annual rate increases designed to ensure that an approved revenue level is collected from customers each year.
  • WMECo has proposed an inclining block rate structure that may harm some customers, including low income customers.
  • The Company offers no commensurate benefits to ratepayers for these rate increases and WMECo makes these requests for increased revenues notwithstanding the fact that, in 2008 and 2009, it failed to meet DPU-mandated Service Quality guidelines for system reliability and provide its customers the service to which they are entitled.
  • Although the Company has failed to meet reliability standards, WMECo is asking for a higher profit for shareholders of 10.5%, a generous return considering the reduced risk to shareholders under its proposed rate plan.

The Department will hold Public Hearings on the Company's request for rate increases this Thursday, August 19, 2010 in Greenfield (Greenfield Community College, Sloan Theater, 7:00 p.m), August 24 in Pittsfield (Berkshire Athenaeum, 7:00 p.m.) and August 26 in Springfield (Springfield City Hall - Room 220, 7:00 p.m). The public hearings will be followed by approximately a month of evidentiary hearings, final recommendations and a DPU decision.

In addition to attending the public hearings the general public can submit written comments on WMECo's filing to the Department of Public Utilities by August 26, 2010 . These may be submitted by mail to: 1 South Station, Boston, MA 02108, or by email to: dpu.efiling@state.ma.us and Selma.Urman@state.ma.us.

WMECo provides electric distribution service to approximately 200,000 customers in 59 communities in western Massachusetts and is an operating subsidiary of Northeast Utilities, a Fortune 500 energy company located in Berlin, Connecticut.

The Attorney General is the Commonwealth's Ratepayer Advocate and represents consumers in matters involving the price and delivery of natural gas and electricity before state and federal regulators.

##########