- Executive Office of Energy and Environmental Affairs
- Department of Public Utilities
Media Contact for Department of Public Utilities Reduces Utility Rates Due to Federal Tax Reform
BOSTON — To ensure Massachusetts ratepayers receive the benefit of recent federal tax cuts, the Department of Public Utilities (DPU) ordered 14 of the state’s regulated electric, gas, and water utilities to reduce their base rates by approximately $116 million, effective July 1, 2018. Average annual bill reductions for residential customers will range from approximately $9 to $40, or a decrease of approximately 1 to 8.5 percent.
The Department’s Order also approves proposals from Bay State Gas, Berkshire Gas, and Unitil to return to customers all tax savings accrued since January 1, 2018. In the second phase of the DPU’s investigation, the DPU will investigate the refund by all other affected utility companies of any tax savings accrued since January 1, 2018, as well as the refund of excess accumulated deferred income taxes to customers.
“Reflecting our commitment to ensuring ratepayers are always receiving the most reliable service at the lowest possible cost, this Order guarantees that the hundreds of millions of dollars in tax savings for utility companies are passed on to hard-working Massachusetts residents, who will see real reductions in their monthly utility bills,” said DPU Chairman Angela M. O’Connor.
Only utilities whose corporate tax rate was reduced through the federal legislation are impacted, including Agawam Springs Water Company, Aquarion Water Company of Massachusetts, Inc., Bay State Gas Company, The Berkshire Gas Company, Liberty Utilities, National Grid, Milford Water Company, Eversource Energy, Pinehills Water Company, and Unitil.
Companies with pending rate cases have the option to defer any tax-related rate adjustments until the end of their cases, on the condition they return all tax savings back to July 1, 2018, with interest at the prime rate.
Under ratemaking principles, utilities in Massachusetts subject to DPU regulation are allowed to reflect a representative level of tax expense in their rates. In order to capture savings for ratepayers in the Commonwealth, DPU opened an investigation in February 2018 to analyze how the recently enacted federal tax reform affects gas, electric, and water utility rates for Massachusetts utility customers.