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BOSTON — The Department of Public Utilities (DPU) today issued a final Order that will lead to investments in clean energy technologies, reductions in greenhouse gas emissions, and improvements in infrastructure resiliency, service reliability and quality, and customer satisfaction while reducing the total rate increase request of NSTAR Electric Company (NSTAR) and Western Massachusetts Electric Company (WMECo), together doing business as Eversource Energy. The action by the DPU follows a ten month investigation that included thirteen public hearings across Eversource’s service territory, nineteen days of evidentiary hearings, and a review of more than a thousand exhibits. Eversource provides electric service to approximately 1.4 million customers in 139 cities and towns in the Commonwealth and across a service territory that spans nearly 3,200 square miles.
The DPU’s Order reduced NSTAR Electric’s base revenue request by approximately $43.8 million — decreasing NSTAR Electric’s requested increase of $56.1 million by 78%. The Order reduces WMECo’s base revenue request by $10.6 million — decreasing WMECo’s requested increase of $34.7 million by approximately 30%. Today’s decision marks the first time that NSTAR’s electric base distribution rates have changed since 2005, and the first time that WMECo’s electric base distribution rates have changed since 2010.
“By significantly reducing the rate increases proposed by Eversource, the Order issued by the Department of Public Utilities will ensure safe and reliable electric service for ratepayers across the Commonwealth while minimizing financial impacts on customers,” said Department of Public Utilities Chair Angela M. O’Connor. “Additionally, today’s decision requires Eversource to pursue important investments in advanced technologies in an effort to strengthen the state’s clean energy economy and reduce greenhouse gas emissions.”
As part of today’s Order, the Department also approved $45 million in investments to accelerate the development of electric vehicle (EV-ready) infrastructure to support growth of electric vehicle usage in the Commonwealth. The Order also authorizes up to a $15 million investment to construct a 5 megawatt (MW) energy storage facility on Martha’s Vineyard and up to a $40 million investment to construct a 12 MW energy storage facility on Cape Cod. The facilities will prevent the need for additional wire projects, including a new cable from the mainland to Martha’s Vineyard, increasing distribution reliability and facilitating the development of distributed clean energy resources. The Department also approved a Performance Based Ratemaking mechanism which strives to balance funding the replacement of essential aging infrastructure with avoiding constantly increasing rate case expenses and rate redesigns which result in uncertainty for Massachusetts residents and businesses. In addition, the improvements in clean energy and carbon reduction technology, as well as a Performance Based Ratemaking structure, incentivizes Eversource to find cost-reducing efficiencies, improve resiliency and customer satisfaction, make investments in advanced clean energy technologies, and reduce greenhouse gas emissions. Additionally, the Order approved recovery of capital investments for electric infrastructure for Seafood Way and Electric Avenue in the City of Boston, and for a New Bedford Service Station, all due to their significance in allowing economic and job growth in their respective communities.
Today’s decision is the first step in a two-phase rate case that will be followed by a rate design Order to be issued on December 31, 2017. In response to comments received during the stakeholder process, the rate design aspect of the case was placed on a separate track in an effort to further consolidate rates in its Eastern and Western Massachusetts service territory. The outcome of that proceeding will specify estimated bill impacts on individual ratepayer classes, and as a result, Eversource has been directed to revise its bill impact analysis and file that with the Department within five business days.
The Order features a provision which precludes Eversource from filing another rate case until 2022, providing rate certainty to ratepayers. Additionally, the rates approved in today’s decision will take effect on January 1, 2018.