- Office of Attorney General Maura Healey
Media Contact for Following Push from AG Healey, Eversource Agrees to Use Savings from Federal Tax Bill to Lower Rates for Customers
Boston — Two weeks after AG Healey called on state utilities to pass their new tax savings onto customers, Eversource has agreed to use the corporate savings it will receive under the new federal tax law to lower rates for its 1.4 million Massachusetts customers.
In a Dec. 20 filing, AG Healey’s Office urged the Department of Public Utilities (DPU) to recalculate Eversource’s recently approved rate hike to reflect the reduction of the federal corporate tax rate from 35 to 21 percent. AG Healey is the first attorney general in the country to publicly call for across-the-board cuts in electric, gas, and water rates, following the passage of the new law.
“This tax bill is being paid for by the people of Massachusetts, so the money should go back in their pockets,” said AG Healey. “Our office filed this action to ensure that these savings go to customers. We are glad that Eversource has done the right thing by agreeing to lower its rates and we call on all our state regulated utilities to do the same.”
When the DPU determines a company’s total revenue requirement, it allows the company to include the amount the company will pay in federal income taxes as an expense in the cost of service. The AG’s Office argued in its filing that because the DPU approved new rates based on Eversource paying the higher federal tax rate, the company’s rates should be reduced to reflect the lower corporate tax rate, ensuring that customers see the savings. In its filing today, Eversource agrees that its rates must be changed to reflect the lower tax rate. The new rates will go into effect on February 1.
In its filing today, Eversource proposes to lower its existing rates for NStar Electric customers by approximately $35 million and reduce the rate hike for its Western Massachusetts Electric Company (WMECo) customers to $16 million, instead of the $25 million approved by the DPU. The AG’s Office is reviewing today’s filing including the company’s calculations of the rate reduction and proposed implementation dates.
In late November, the DPU issued an order allowing Eversource to increase its electric rates by $37 million in the first year and an additional 3.5 percent per year over the following four years. This equated to a $12 million increase in the first year for NStar customers and $25 million for WMECO customers.
The AG’s Office also filed a petition with the DPU last month requesting that the Department recalculate the rates for all major electricity, gas, and water companies to reflect the lower corporate tax rate. Doing so, would lower all Massachusetts utility customers’ rates.
Last month, the AG’s Office filed an appeal of the DPU’s decision in the Eversource rate case, specifically the DPU’s approval of a 10 percent shareholder return, one of the highest allowed by an electric distribution company regulator in the country. 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.