For Immediate Release - October 02, 2014

AG Urges DPU to Mitigate ‘Rate Shock’ to Consumers, Investigate Way to Reduce Spikes in Winter Rates

AG Also Requests Extension of Winter Moratorium to Assist Low-Income Homeowners

BOSTON – With significantly higher heating prices expected this winter, Attorney General Martha Coakley has asked the Department of Utilities (DPU) to help mitigate electricity “rate shock” to consumers and open an investigation into ways to reduce these sudden spikes. The AG’s Office is also requesting a one-month extension to the state’s winter moratorium, banning companies from shutting off electric or gas supplies due to consumers struggling to pay their heating bills.

“Electricity prices in Massachusetts are already higher than the national average, so this dramatic increase in National Grid’s rates is an extraordinary undertaking for families and businesses across the state who cannot continue to absorb these rising costs,” AG Coakley said. “We request that the DPU examine ways to smooth out this impact, and consider deferring all or a part of the rate increase to a more flexible and affordable time period for customers.”

In a letter to the DPU today, the AG’s Office asked the DPU to work with National Grid to mitigate its recent increase in basic service rates starting next month, possibly by spreading out the burden to reduce the impact on consumers. The AG’s Office argued that the rate increase does not provide consumers with a reasonable amount of time or ability this winter to adjust their consumption patterns.

The AG’s office also requested that the DPU investigate ways to reduce rate increases in future winters, including a review of utility procurement practices and overall competition in the supply market.

Last month, National Grid filed its basic service rates and warned that, due to higher power supply prices, a typical residential customer will see an increase from last year on their winter electric bills of 37 percent, or about $33, each month from Nov. 1, 2014 to April 30, 2015.  The DPU approved the filing on Sept. 23, 2014.

The AG’s Office requested that the DPU work with National Grid to determine what part of the cost recovery of the winter rates, if any, may be deferred until the next 6-month period, May 1, 2015 through Oct. 31, 2015.  The DPU is asked to seek the involvement of stakeholders and establish some process to determine whether deferrals are appropriate.

The letter also requests that the DPU look into allowing more flexibility in the timing of recovery for basic service supply costs for other rate classes as well, and open a separate investigation into the sufficiency of competition in the electricity supply market, and review its basic service procurement practices. Finally, the AG’s Office requested that the DPU explore initiatives which could provide customers with greater notice of these changes.

From November 15 to March 15 each year, Massachusetts law provides a winter moratorium for residents who are struggling with their heating costs. During those months, gas and electric companies cannot shut off service because of inability to pay. In a separate letter to the DPU today, the AG’s Office requested that it require local distribution companies to extend the winter moratorium to April 15, 2015 to ensure that no low-income households unable to pay their heating bills will be shut off when the temperatures could still be cold. This moratorium does not apply, however, if service was shut off for non-payment before November 15, 2014.

Massachusetts provides some additional protections from utility shutoffs for those who qualify. Under certain circumstances, a gas or electric utility is not allowed to shut off the heat, even for non-payment. To qualify, contact the utility company and explain the situation. These circumstances are if everyone in the household is over 65, if the consumer can demonstrate to the company that he or she is unable to pay the bill, and that someone who lives in the home is seriously ill or is a child under the age of one.

Additional resources for consumers are available on the Attorney General’s website, or by contacting the Attorney General's Consumer Hotline at (617) 727-8400.

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