- Office of Attorney General Maura Healey
Boston — Attorney General Maura Healey today appealed the Department of Public Utilities’ (DPU) ruling in the Eversource rate case, specifically the DPU’s approval of a costly 10 percent shareholder return, one of the highest rates allowed by an electric distribution company regulator in the last five years.
In its Petition to Appeal filed today, the AG’s Office alleges that the DPU violated the state Administrative Procedures Act and legal precedent by failing to adequately explain or support its order increasing Eversource’s allowed shareholder profits – or rate of return on equity (ROE).
“The DPU’s order would increase costs for Massachusetts electricity customers by tens of millions of dollars,” said AG Healey. “We are appealing because customers deserve to know why the DPU chose to enrich Eversource shareholders at the expense of electric ratepayers.”
The DPU sets a utility company’s ROE as one part of a company’s costs in a rate case. Last month, the DPU set Eversource’s ROE as part of its decision to increase electric rates for Eversource’s 1.4 million customers by $220 million over the next five years, including a $37 million increase in the first year and additional annual increases of over 3.5 percent for the next four years.
AG Healey and her office have challenged Eversource’s proposed rate increase since the company announced it in early January. The company’s original proposal included a request for a 10.5 percent ROE. The AG’s Office, in its first legal brief filed on the case in July, urged the DPU to reject the request and to lower the ROE to 8.875 percent.
In December 2016, after the DPU allowed a 9.9 percent ROE as part of National Grid’s $101 million rate hike, the AG wrote to the DPU urging it to open an investigation to consider, among other issues, how the Department could provide more information in its orders on its decision-making process for setting a utility’s ROE. In the letter, the AG expressed concern about the upward trend in Massachusetts’ allowed ROE and the lack of transparency when it sets a company’s ROE.
Today, the AG’s Office also filed a motion for reconsideration, again urging the DPU to reduce customers’ annual rate increases under Eversource’s five-year rate plan, along with reconsidering how it treats the accounting and recovery of certain vegetation management expenses, which would save customers over $40 million.
AG Healey’s Energy and Telecommunications Division has been working on the Eversource rate case over the past year, including analyzing all of the company’s filings, questioning the company during the discovery process, cross-examining witnesses during evidentiary hearings, and testifying at 10 public hearings across the state.