For Immediate Release - January 07, 2015

NSTAR to Refund $44.7 Million to Customers Overcharged for Capital Projects, Pensions, and Energy Efficiency Programs

AG Resolves 11 Cases Pending Before the DPU in Which Ratepayers Were Overcharged

BOSTON – NSTAR Gas & Electric Company has agreed to pay $44.7 million to refund its customers, resolving 11 previously outstanding cases before the Department of Public Utilities (DPU) that deal with the company’s capital improvements, pension expenses, and energy efficiency programs, Attorney General Martha Coakley announced today. 

NSTAR’s delivery rates include certain cost components that are updated annually outside of the base distribution rate cases. These so-called “reconciliation factors” are supposed to be reviewed and reconciled against actual costs by the DPU after investigation and hearings. In practice, the DPU permits the utilities to collect the rates immediately and rarely completes its review in a timely manner. All of the cases have been outstanding for a number of years prior to the settlement reached by the AG’s Office and NSTAR.

“Our office has consistently called for full investigations of these charges in a timely manner to protect utility customers in the Commonwealth,” AG Coakley said. “Today’s settlement highlights the need to return to basic ratemaking principles, rather than relying on these annual rate adjustment mechanisms for utility cost recovery.”

Under the terms of the settlement, NSTAR Electric has agreed to refund more than $17.1 million to correct overcharges for project expenses that it agreed to undertake to improve reliability and safety of its electric distribution system. NSTAR had filed requests with the DPU for the recovery of revenues and costs of the projects from 2006 through 2011. 

NSTAR agreed to refund more than $23.6 million in pension benefit costs that were double-collected through both its Pension Adjustment Factor and its Energy Efficiency charges from November 2003 through December 2012. NSTAR will refund an additional $4 million to correct other components of its energy efficiency charges between 2009 and 2011.

Under the terms of the settlement, NSTAR will provide restitution to its current customers through rate reductions on their bills after the settlement is approved by the DPU. The parties have requested approval of the settlement by March 2, 2015.

This matter is being handled by Assistant Attorney General Joseph Rogers and Analyst Timothy Newhard of AG Coakley’s Energy and Telecommunications Division.