"Report scolds WMECO for rate hikes: The state says the company announces its rate hikes poorly. A 26 to 30 percent hike is now sought"
By Ellen G. Lahr, Berkshire Eagle Staff
Thursday, May 22, 2008
The state attorney general's office has found that Western Massachusetts Electric Co.'s dramatic rate increases in January 2007, which led to average cost hikes of 55 percent for area businesses, were legal but poorly communicated to customers.
And in an epilogue to that 24-page ruling, Attorney General Martha Coakley's report noted that WMECO filed a May 19 request for a new rate boost that will bring another 26- to 30 percent increase to the electric bills of its commercial and industrial power customers.
The company's plan to now notify customers of rate increases with press releases and phone calls, she said, "should be considered a best practice'' by all power distribution companies.
Regarding last year's rate hikes, Coakley's report stated: "Although the rate increases that customers in Western Massachusetts received at the beginning of 2007 were lawful, we are concerned that WMECO did not take steps to notify its customer base that the rate hike was going into effect," said Coakley.
Customers were not given a notice or an explanation of the rate hikes until March 2007. The information given was "misleading," but was corrected, the report states.
However, the report finds that WMECO's earnings last year were appropriate under a settlement between former Attorney General Thomas Reilly and WMECO in October 2006. WMECO was allowed hike rates to recoup losses it had incurred.
Of the upcoming rate hike, Coakley noted that 83 percent of large commercial and industrial customers in WMECO's service area won't be impacted because they are big enough to buy power through competitive bids.
But Berkshire County includes many medium-sized businesses not large enough to draw competitive bids, and they will feel the pinch again. Power costs here in the Northeast are among the highest in the nation, and have undermined efforts to attract and retain business, according to area business leaders.
Compounding costs in this region, Coakley noted, is "a notoriously poor transmission infrastructure, which means the region has difficulty importing electricity from other regions."
These problems have led to the use of four costly and inefficient generators in the area, one of which is at the Altresco plant in Pittsfield.
Coakley's report raised concerns about the company's compliance with requirements for transmission line improvements that would help curtail costs.
"We intend to continue to monitor whether WMECO is undertaking the needed transmission upgrades, which is part of the solution to mitigating the rising cost of electricity in Western Massachusetts," Coakley said.
Earlier this year, the Berkshire Chamber of Commerce organized a consortium of businesses to form an energy cooperative. The group is seeking competitive bids from power providers to stabilize costs, a process still in the works.
Yesterday, Chamber President Michael Supranowicz could not be reached for comment.
State Rep. William "Smitty" Pignatelli, D-Lenox, said yesterday he believes the process by which WMECO was able to get such a huge rate hike approved in late 2006 was inadequate. He said it reflected internal company cost issues that were being passed on to customers.
Three manufacturing mills that closed in his Southern Berkshire district last year and this year were all impacted by power cost hikes. Those closings cost about 400 jobs.
He also said WMECO's most current rate hike proposal is "extremely surprising."
"The previous process was extremely flawed and unfair, and caught our large users by surprise," said Pignatelli. "Now it seems (Coakley) is more on top of things, and I hope (the state) will do a more thorough review of rate hike requests."
In general, he said, deregulation of the electric utility industry has not worked, said Pignatelli.
"There isn't new competition, rates are not leveling off and now we have a significant new increase from WMECO," he said. "We need to be more aggressive at the state level."
The attorney general serves as a utility ratepayer advocate and is authorized to intervene on behalf of consumers regarding rate issues.
While Coakley's report states that mill closings last year were caused by rate hikes, other market forces were at work as well with the shutdowns of the former Fox River Paper Co., one mill of MeadWestvaco, and now Schweitzer-Mauduit in Lee.
"It's a huge issue, and a lot of people want to blame mill closings on electric rates, but that's just part of the problem," Pignatelli said.
For the full report from the attorney general, visit www.mass.gov/ago.
To reach Ellen G. Lahr: firstname.lastname@example.org, (413) 496-6240.
The Berkshire Eagle - Editorial
Friday, May 23, 2008
Although we live in an age when technology allows for instantaneous communication, it's amazing how many companies fail to get information out both clearly and on time. That is the case with Western Massachusetts Electric Company which the state attorney general's office found instituted dramatic rate increases in January 2007 that were legal but poorly communicated to its customers. WMECO appears to have gotten the message. According to Attorney General Martha Coakley's report, the utility company now plans to use phone calls and e-mails to notify customers of another 26-to-30 percent hike to the electric bills of its commercial and industrial customers.
What's still murky, however, is WMECO's decision to seek another substantial rate increase while it maintains "a notoriously poor transmission structure," according to Ms. Coakley's report. WMECO can't have it both ways. It needs to get its own house in order first. The utility company should fix its infrastructure problems before asking for an additional rate hike or it isn't being fair to the customers who will have to pay more.
It's impossible to justify a rate increase when WMECO's facilities are so lacking, "the region has difficulty importing electricity from other regions," according to the attorney general's report. These infrastructure problems have led to the use of four costly and inefficient generators, including one at Pittsfield's Altresco plant. The WMECO situation is just the latest evidence of the utter failure of energy deregulation.
State Representative William "Smitty" Pignatelli, D-Lenox, calls WMECO's current request "extremely surprising" and he should know. Power cost hikes were one reason three South County mills recently closed, which cost numerous Berkshire County residents, most of whom live in Mr. Pignatelli's district, their jobs. These businesses aren't large enough to attract bidders, leaving them with no alternatives for power. Given this reality, and without the efficient means to transport power to the Berkshires, it's hard to see how WMECO's rate increase is justified.
Ms. Coakley 's office will continue to monitor whether WMECO undertakes transmission upgrades, which she said is part of the solution to "mitigating" the rising cost of electricity in Western Massachusetts. That may be the best thing to happen out of all this.
"Right place for hearing"
The Berkshire Eagle - Editorial
Wednesday, May 28, 2008
The U.S. Senate Committee on Small Business and Entrepreneurship came to the right place when it chose Berkshire Community College for a hearing this morning at 10 on the impact of rising energy costs on small businesses. Of all of the obstacles facing small businesses in the Berkshires, escalating energy costs, personified by the dramatic rate increases by WMECO, which is requesting another 30 percent hike for local businesses, may be the most formidable. With so many members of Congress beholden to the oil industry, it is difficult, as noted by Senator John Kerry, who was instrumental in bringing the hearing to the city, to push through measures encouraging the production and use of alternative energy sources. Today's hearing should detail the problems facing small business and explore some ways in which government can help business rather than hinder it.
"Power costs under review: Coakley to examine WMECO's earnings"
By Ellen G. Lahr, Berkshire Eagle Staff
Friday, November 09, 2007
Western Massachusetts Electric Co.'s reports of dramatic third-quarter earnings — apparently based on rate hikes that have hit some industries in the region hard — have triggered an inquiry by Attorney General Martha Coakley.
WMECO on Monday reported that third-quarter distribution charge earnings were $4.2 million and totaled $13.6 million in the first nine months of 2007.
For the same period last year, those earnings were $2.8 million and $8.6 million, respectively.
WMECO said its improved results were the result of a settlement reached last year with former Attorney General Thomas F. Reilly.
Now Coakley will inquire as to whether WMECO's earnings are consistent with the terms of that October 2006 rate settlement. The company has been obligated to make transmission upgrades and was allowed to recoup $1 million for delivery costs.
All electric customers pay one price for the actual electricity they use and another for the cost of delivering that electricity. In this case, the attorney general is scrutinizing the delivery charges, which are set by the utility with state oversight.
"Following WMECO's report of earnings growth in the third quarter and all of 2007, we want to make sure that these earnings are consistent with the settlement agreement and applicable state and federal law," Coakley said in a statement.
"In addition, a number of large commercial and industrial users have reported large increases in their delivery bills in January of 2007, and we want to determine whether these rate increases are appropriate," she stated.
Efforts to reach a WMECO spokesman yesterday were not successful.
Berkshire legislators have watched as local industrial power users faced crippling rate hikes this year. Yesterday, two members of the delegation hailed Coakley's actions as confirmation that something is off the mark at the region's biggest power supplier.
State Sen. Benjamin B. Downing, D-Pittsfield, said that, "considering the spike in rates we've seen — especially for commercial and industrial users, specifically at Southern Berkshire's paper mills, but elsewhere in the county as well — this shows first and foremost that the AG is responsive to needs of Western Massachusetts and that something is wrong at (WMECO)."
"The Berkshire delegation has been looking at this over the last 10 months, saying there is something amiss here," he added.
State Rep. William "Smitty" Pignatelli, D-Lenox, concurred, hailing Coakley's inquiry as "great news."
Pignatelli's district has seen the shutdown — or pending shutdown — of three paper mills this year. Energy costs were assessed part of the blame, contributing to rising overhead that helped make the businesses untenable.
"It seems strange that a lame-duck attorney general (Reilly) could sign this rate agreement a couple of days before leaving office, without fair knowledge of the impact on large users," he said.
Large commercial users this year have reported increases in electrical distribution charges of up to 70 percent. Some, such as Hancock's Jiminy Peak Mountain Resort and Dalton's Crane & Co., are seeking alternative sources of energy.
The attorney general serves as overseer of the utility industry and is authorized to intervene in administrative and/or judicial proceedings on behalf of consumers in connection with any matter involving the rates, charges, prices or tariffs of any electric company doing business in the state.
Her office said that the state's Energy and Telecommunications Division sent WMECO a series of oversight questions today regarding its profits and rates. WMECO must respond to these questions within 21 days.
"Consumers footing the bill?: Federal investigators probe high electric costs"
By Scott Stafford, The Berkshire Eagle Online, August 25, 2008
The Federal Energy Regulatory Commission is investigating allegations that the wholesale cost of electricity generated in western New York has been artificially inflated by a practice called circuitous routing.
Authorities in six northeastern states and several agencies that regulate energy production and distribution recently called for an investigation into the practice, only to find out that FERC has been probing the matter since May.
The alleged practice, known to some as the "Lake Erie Loop Scam," is scheduling power to flow over circuitous routes around Lake Erie a day ahead of its actual transmission. The so-far-unnamed market participants save money by avoiding certain tariffs and fees by scheduling to send the electricity north to Canada and back south again.
They may further profit because electricity will take the path of least resistance and will not actually flow through the path scheduled, causing congestion along other transmission lines and further inflating the cost.
According to an estimate released by the Massachusetts Municipal Wholesale Electric Co., the practice may have resulted in overcharges to consumers amounting to more than $450 million since January.
"This is a New York (State) issue that has some very serious financial consequences for Massachusetts," said David Tuohey, spokesman for Massachusetts Municipal Wholesale Electric Co. "Our bills just for transmission for the month of July went from $1 million to $3 million. That's a big impact for us. But the aggregate cost resulting from this activity is in the hundreds of millions of dollars."
The New York Independent System Operator, which regulates the production and transmission of electricity in New York, had asked the federal agency for expedited rulings on their request to impose new rules and fees to curtail the practice that results in needlessly inflated wholesale prices for electricity.
According to the Federal Energy Regulatory Commission, NYISO's request had been granted.
The rapid rise in the cost of electricity in Berkshire County has been cited in the closing of several paper mills and the withdrawal of a plan to bring a water bottling operation to the former KB Toys distribution warehouse. It has also been identified as a barrier to bringing other new business into the region.
None of the officials contacted could definitively say that Western Massachusetts electricity customers had been impacted.
"We've been trying to calculate the effect to our customers," said Steve Brady, spokesman for National Grid, from his office in Buffalo, N.Y. "We don't believe this had or will have any financial impact on our New England customers. And while we were impacted by the flow congestions, we were not a cause of the flow congestions."
An official from Western Massachusetts Electric Co. who is knowledgeable on the subject was on vacation and could not be reached.
But Massachusetts Municipal Wholesale Electric Co. officials said 40 municipally-owned utilities in Massachusetts receive hydro-generated power from the Niagara Hydroelectric Project in western New York. None of them are in Berkshire County. Other states that were seeking an investigation are Connecticut, Rhode Island, Vermont, New Jersey, Pennsylvania and Ohio.
"We're already burdened by too many costs associated with both the production and the delivery of electricity," said Michael Supranowicz, president of the Berkshire Chamber of Commerce. "If someone is doing something that's undermining our ability to get electricity delivered to us in a manner that provides the best value to the end user, they need to be investigated — we need to make sure no one is doing anything underhanded here."
The Massachusetts Municipal Wholesale Electric Co. was one of the entities calling for an investigation "to determine whether the alleged abuse of power market rules warrant a refund to our municipal utility consumers," said Ronald C. DeCurzio, the company's CEO. "The fact that New York's power grid operator did not catch and curtail this activity sooner underscores the need for greater oversight and accountability in restructured power markets, where the cost to consumers is often an afterthought."
"These traders can find what they're calling in this case seams in the rules, I prefer to call them loopholes, where there are opportunities to make some money and they certainly don't hesitate to do that," Tuohey said. "If there was indeed manipulation of the market rules with the knowledge that it would increase prices and these entities would profit from that, it's an abuse of the market rules and warrants some refunding."
The New York ISO became aware of the matter when officials noticed "the congestion was inconsistent with patterns in the past," said Ken Klapp, spokesman for NYISO. "So that was the first flag. But it took months to investigate because you're looking at thousands of bits of information."
"The Federal Energy Regulatory Commission today accepted interim New York Independent System Operator tariff revisions that will help to stem the use of circuitous transmission paths," said Barbara Connors, Federal Energy Regulatory Commission spokesperson, in a statement. "FERC also announced that in May, FERC's Office of Enforcement initiated a non-pubic investigation into power flows in NYISO."
Rep. Daniel E. Bosley, D-North Adams, chairman of the Joint Committee on Economic Development and Emerging Technologies, said the Federal Energy Regulatory Commission was wise to look into the situation.
"Part of the problem is we already have congestion pricing that I'm not really sure is warranted," he said. "And then you have some of these people, it appears, are using unscheduled flow to drive the price up even more and maximize money going to them. You would hope people wouldn't do that."
"The commission does have enforcement authority and civil penalty authority," Connors added. "We haven't quite gotten to that point yet because we're still looking into it."
To reach Scott Stafford: email@example.com, or (413) 664-4995.
By "Vote The Bums Out", 8/25/2008 -
You would hope people wouldn't do that ? What did you think would happen when they were deregulated???? Remember who voted for deregultion?? You did and I will remember that when I vote. The electric companies and the cable TV companies are sticking it to the people and the Dan Bosleys of the world are doing nothing about it.
By "Berkshire Resident", 8/25/2008 -
The rise in the cost of electric power has caused an important paper company in Lee to down-size or shut-down, thus causing many people to lose their jobs.
There are many empty store fronts there now and it is very sad to walk around and wonder how many more businesses will be forced to close?
Will this be a town whose citizens will be only seniors on fixed incomes? Not that I am against seniors--I am one myself. I moved to Lee to be near my family; unfortunately, they had to move to find employment!
"Lonely in Lee"
"Berkshire Gas's unconscionable hike"
The Berkshire Eagle - Letters
Tuesday, November 25, 2008
I contacted Berkshire Gas to inquire about the sudden jump in my gas bill. I know it gets colder from September to October, and gets colder still from October to November, so we're all aware our gas bill will rise. But looking closer I noticed that Berkshire Gas is prorating and upping the first few days of November, going from $0.8680/Therm to $1.2110/Therm. If my math's correct that's about a 40 percent increase!
When I asked why the rate is going up ,the attendant told me "it was a natural gas supplier forcing up the rate" and there was nothing Berkshire Gas could do about it. Then I asked, "What is the justification for the increase?" and she said, "It's tied to the stock market." Which I then said, "so the rate should be going down then, right?" She said, "well, it's also tied to the price of oil," which I responded, "oil is at a two-year low of about $60 a barrel." Then she said "well it's tied to a bunch of other factors too." Seeing where the conversation was heading I just stated for the record that this price increase in this economic time is just unconscionable.
With many folks I've talked to adding pellet stoves, wood stoves, electric space heaters, and so on to battle energy costs this winter I would think demand for natural gas would be less than last year. Perhaps some other customers can give Berkshire Gas a call and find out what those other "factors" are causing the giant jump in natural gas. I'd really love to know.
John McAlister is director of information technology at the Massachusetts Museum of Contemporary Art in North Adams.
"Solar power boost for city: WMECO names 3 possible sites"
By Dick Lindsay, Berkshire Eagle Staff, Monday, March 02, 2009
PITTSFIELD — Western Massachusetts Electric Co. wants to include Pittsfield in the utility's first- ever effort to produce solar-powered electricity that will reduce its dependency on providing customers with fossil fuel energy.
And city officials are thrilled about having another "green" project.
WMECO has identified the city's closed landfill, the Willliam Stanley Business Park and utility-owned property on Silver Lake Road, as three of eight potential host sites of solar facilities. The other five are in Springfield, Ludlow and Amherst.
These initial eight locations will provide six megawatts of solar capacity by 2010 at a cost of about $42 million dollars. By 2012, WMECO will expand the solar power production to 15 megawatts, which would be tied into the company's power grid and provide enough electricity to power 15,000 homes, according to utility officials.
"This is kind of groundbreaking for us," said Peter J. Clarke, president of Northeast Utilities, the parent company of WMECO. The Springfield-based utility serves about 200,000 homes and businesses in 59 communities, including Pittsfield and 15 Berkshire towns.
"I give credit to WMECO for looking at Pittsfield," said John Krol, chairman of Pittsfield's Green Commission. "I'm impressed by their $42 million investment and I want to see some of that in our city."
Commissioner of Public Works and Utilities Bruce I. Collingwood said the city could make some money off the project, as WMECO would lease space at the landfill.
"There's a definite financial benefit to the city," said Collingwood.
"Besides, I'd rather be collecting sun rays than mowing grass," he added, referring to the constant summer maintenance of the expansive site.
Clarke said WMECO is the first utility in Massachusetts to submit a solar energy program for approval from state utilities regulators under the state's Green Communities Act. The legislation passed last year calls on electric distribution companies to produce 250 megawatts of solar power by 2017 and reduce the state's reliance on traditional sources of electricity.
"We always felt the need to be part of the solution," Clarke said during a recent telephone interview. "With our dependence on natural gas (to produce electricity) in the Northeast, we need a more balanced mix."
While the Green Communities Act allows WMECO to produce up to 50 megawatts of solar capacity, Clarke said the company wants to evaluate which of the initial sites are most productive and build out its solar capacity from there.
"We are taking the 'walk before you run' approach," Clarke noted.
The utility-sponsored solar project is the latest to brighten up Pittsfield.
The city is already in line to receive $13.4 million in federal stimulus funds for a solar photovoltaic system to be installed on the roof of the wastewater treatment plant off Holmes Road and on the grounds of the facility. The state supported project, coupled with other energy-saving efforts, will greatly reduce the plant's electric bill, according to Collingwood.
Krol said Pittsfield put itself in a position to land these solar projects because city government took the initiative to have more energy efficient municipal buildings.
"When you make a commitment to be green, these opportunities come your way," Krol said.
"These projects are not only good for the environment, but the bottom line as well," he added, "and businesses need to see that."
However, Clarke said with the high up-front cost of solar energy, the challenge is to "keep it affordable and still meet the state's target for renewable energy."
He noted fewer than 5 percent of nation's solar installations are connected to New England's power grid and the region needs to catch up with the rest of the country.
"The bigger objective is more about a social movement than just the dollars saved," Clarke said.
To reach Dick Lindsay: firstname.lastname@example.org, or (413) 496-6233.
"Solar energy parcels targeted: Western Massachusetts Electric is considering eight sites, including three in Pittsfield, to construct a facility."
By Tony Dobrowolski, The Berkshire Eagle, Thursday, August 13, 2009
PITTSFIELD -- The Western Massachusetts Electric Co. will consider eight sites in Western Massachusetts -- including three in Pittsfield -- on which to build large-scale solar energy facilities in its service territory.
The Pittsfield sites include the William Stanley Business Park of the Berkshires; a WMECO-owned parcel off Silver Lake Boulevard, which is adjacent to the Stanley Business Park; and a former city landfill located between East Street and the Downing Industrial Park on Hubbard Avenue. The rest are located outside of the Berkshires.
The Department of Public Utilities on Wednesday approved the utility company's proposal to own and operate solar power installations, part of the state's 2008 Green Communities Act to promote renewable energy.
On Wednesday, WMECO became the first utility in the state to receive the OK to own and operate solar energy facilities within its service territory, which includes the four counties of Western Massachusetts. The DPU said it also is considering solar programs submitted by National Grid and Unitil. The utilities can build solar energy installations generating up to 50 megawatts.
WMECO expects the project's development phase to cost $42 million and generate six megawatts, enough energy to power 6,000 homes.
The solar facilities will be large ground-mounted panels that will probably stand four feet off the ground, said WMECO spokeswoman Sandra Ahearn.
"They will have banks of solar panels that angle toward the sun," she added.
Specific site locations in mind
WMECO targeted six types of sites as locations for solar installations: landfills, brownfields, large commercial facilities, government buildings, utility properties, and high-visibility public properties.
The William Stanley Business Park, located on 52 acres of the General Electric Co.'s former transformer facility, is a brownfield, a former industrial site that is the process of being reclaimed. The Pittsfield Economic Development Authority is charged with developing the Stanley Business Park, which currently has no tenants. PEDA's interim Executive Director William M. Hines Sr. could not be reached for comment late Wednesday afternoon.
The next step is for WMECO to solicit a request for proposals, or RFPs, from the owners of the sites. Under the DPU's decision, WMECO is required to seek RFPs for the first three megawatts of its solar facilities by September. The utility hopes to pick the sites and builders during the last three months of 2009.
"What the decision has done is asked us to focus on larger sites so we can get better economies of scale in terms of total costs," Ahearn said.
Construction is expected in early 2010, she said, and three of the facilities should be up and running by the end of next year. The rest should be fully operational by 2012, according to the DPU.
Just as utilities bill customers for the cost of fossil-fuel generated electricity, the cost of utility-owned solar power will be recouped through ratepayer revenues. The WMECO order includes a settlement between the company and the state Attorney General's office ensuring the costs of the utility's solar program will include stricter cost controls and be spread over more years than WMECO originally proposed.
"It moves the commonwealth closer to [Gov. Deval L. Patrick's] goal of 250 megawatts of solar power by 2017, while protecting ratepayers by spreading out the cost of financing WMECO's solar energy program," DPU Chairman Paul Hibbard said in a statement.
Material from the Associated Press was used in this report.
To reach Tony Dobrowolski: email@example.com, or (413) 496-6224.
"WMECo's hike request"
The Berkshire Eagle, Editorial, July 24, 2010
If you are a consumer there is never a good time for a rate hike these days, although if the rate increase requested by the Western Massachusetts Electric Company is approved no consumer will be hit with a $12,000 fee like one Lee cable customer. WMECo will be asked in the months ahead to defend a hike that will increase the average residential customer's utility bill by about $50 a year, and it is taking that responsibility seriously.
This is WMECo's first rate hike request in three years, and the energy dynamic has changed during that time. Increasingly violent Berkshire storms, most notably the 2008 hilltown ice storm, have resulted in deferred repair costs and made it necessary to harden systems in anticipation of the inevitable bad storms to come. Uncollectible balances from the poor, often the elderly, whose power obviously cannot be cut off for humanitarian reasons, affect the bottom line, as do subsidies for small business and home audits and other energy-conservation programs.
In an editorial board meeting at The Eagle, WMECo President and CEO Peter J. Clarke said that the company also wants to upgrade its infrastructure. We have seen in Massachusetts what happens when the state lets highway and bridge infrastructure go -- repairs are done in crisis mode at far greater cost to taxpayers than the cost of maintaining the infrastructure would have been over the years. WMECo is plainly intent on heading off a pole and wire infrastructure crisis that could lead to far higher rate hikes.
The path to DPU approval of the rate hike request, which would take affect next February, is a lengthy one. Hearings will be conducted, including a public hearing August 24 at 1 p.m. at the Berkshire Athenaeum in Pittsfield. WMECo is candid about the reasons for a request it isn't making lightly, and Berkshire residents should avail themselves of the opportunity to learn all the details.
"Coakley critical of rise in rates"
By Tony DobrowolskiBerkshire Eagle Staff, August 18, 2010
PITTSFIELD -- Attorney General Martha Coakley said Tuesday that her office will oppose a proposed $28.4 million rate hike that the Western Massachusetts Electric Co. filed with the state last month.
If approved by the state’s Department of Public Utilities, the average residential customer’s utility bill would increase by $7.50 per month -- $90 per year, a rise of 8.2 percent -- effective Feb. 1, 2011, according to WMECO. An average residential customer uses 600 kilowatt hours per month.
In an interview with The Eagle on Tuesday, Coakley called the rate hike proposal "excessive," and said the utility company is required to justify why such an increase is necessary.
"We don’t believe that they have made the case with the quality of service they give or their costs," Coakley said.
"The burden is on [WMECO] to justify it," she added. "A public utility is a necessity, not a luxury, and people rely on it."
WMECO President Peter J. Clarke told The Eagle last month that the hike is necessary because of declining revenues, the failure to meet state reliability requirements, deferred costs from several major storm cleanups, a need to train replacements for an aging work force, and customer demand for better service.
"In some ways, they’re not inaccurate that those are all costs that they’ve incurred," Coakley said. "Our argument is that some of those things are things that they’re supposed to be doing as a utility company."
WMECO distributes electricity to 200,000 customers in 59 communities in the four counties of Western Massachusetts.
The DPU will hold a public hearing on the rate hike at 7 p.m. on Tuesday at the Berkshire Athenaeum in Pittsfield. Representatives of the state attorney general’s office will be there, too, but in an advisory position.
"We will mostly be there to listen to the public," Coakley said.
WMECO spokesperson Sandra Ahearn said the utility company believes that it has released a balanced proposal that satisfies the company’s need to make improvements in the system.
WMECO spokesperson Sandra Ahearn said the utility company believes that it has released a balanced proposal that satisfies the company’s need to make improvements in the system.
"I think that [the AG’s office] in their role as consumer advocate is to weigh in on cases like this," said Ahearn.
"We disagree with their position," she continued. "We believe that we put together a very thoughtful and detailed proposal that will be discussed at great detail in the upcoming (public) hearings.
In addition to the public hearings, the public can submit written comments on WMECO’s filing to the DPU by Thursday, Aug. 26.
Comments can be submitted via mail to: 1 South Station, Boston, MA 02108; or by e-mail to either firstname.lastname@example.org or email@example.com.
Points of contention
Here are the concerns the state attorney general’s office has with WMECO’s proposed rate hike:
. WMECO is seeking to shift more risks onto ratepayers by requesting recovery for capital expenditures, including infrastructure improvements, an inflation allowance, and bad debt and other collectibles.
. If approved, the proposal will result in annual rate increases designed to ensure that an approved revenue level is collected from customers each year.
. A proposed inclining block rate structure may harm some customers, including those of low income.
. There are no commensurate benefits to ratepayers for these increases.
. Although WMECO has failed to meet reliability standards, the company is asking for a higher profit for shareholders of 10.5 percent.
-- Source: Attorney General Martha Coakley’s office
"Deny indefensible WMECO request"
The Berkshire Eagle, Letter to the Editor, August 20, 2010
Congratulations to Attorney Martha Coakley's office for its stand in opposing the proposed $28.4 million rate request from Western Massachusetts Electric Co.
After reading of this request in the Berkshire Eagle a short time ago, I went to the WMECO website and downloaded its volumes of testimony. There are 11 volumes presented by 11 individuals on behalf of WMECO. The total number of pages including charts and graphs to attempt to convince one of its need for this increase is 1,379.
An example from Vol. 1 of what is included is "Rate relief request." Q. Why is WMECO seeking to increase rates at this time? A. There are several factors that compel WMECO to seek a rate increase at this time. First since the last rate adjustment, WMECO has incurred significant cost on behalf of customers that we now seek to recover. These are largely driven by responses to storms and growing active hardship protected uncollectible expenses."
My reading of a number of their pages for this request (I haven't yet completed reading all volumes) reveals similar examples of the same. Requests made, but failure of WMECO to properly manage for these events.
The rate increase would lead to more people falling behind and unable to keep up. WMECO must face the same economic times households, other businesses, cities and towns are facing.
People on fixed incomes are among the most vulnerable. They receive no increase in their income, Social Security or pension, but have faced over the years increased real estate taxes, rents, electric, gas, fuel, groceries, Medicare, health insurance, car registration and insurance, home owners insurance, medicine, clothing, taxi fares and public transportation costs, as well as cuts from state and federal programs to help them. Add another cost of $90 a year to this and you will find that there is no more belt left to punch another hole in.
This increase should be denied!
"WMECO users fear hike"
By Dick Lindsay, Berkshire Eagle Staff, August 25, 2010
PITTSFIELD -- Granting Western Massachusetts Electric Co. a $28.4 million rate increase will be a costly burden for local utility users to shoulder.
Residential and commercial customers of WMECO in Berkshire County hammered home that message Tuesday night at the Berkshire Athenaeum in Pittsfield before officials with the state's Department of Public Utilities.
The DPU held the second of three public hearings regarding the utility's proposed rate hike that would increase the average residential customer's electric bill by $7.50 per month, or $90 per year, a rise of 8.2 percent, according to WMECO. An average residential customer uses 600 kilowatt hours per month.
Utility bills for WMECO's commercial and industrial customers would increase on average between 1 percent and 6 percent, depending on load and usage.
The DPU is expected to render a final decision in January and if the rate hike is approved, it will go into effect Feb. 1, 2011.
For Amanda Briggs, of Pittsfield, a higher electric bill could adversely affect her family's future. The mother of four children is attending college in order to improve her chances of getting a better job, but that scenario is in jeopardy.
"I won't be able to go to school and I'll have to find another job just to pay the bill," Briggs said.
Local business owners also view the utility's rate hike request as an attack on their livelihood.
Pat Begrowicz, co-owner of Onyx Specialty Paper, said her company -- the last remaining paper manufacturer in Lee -- is slowly growing in the current economic climate. However, higher electricity costs could stunt that growth.
"The $28 million increase will have a six-figure impact on our energy bill, our third largest expense," Begrowicz said. "We'll be paying more for the delivery service than the electricity we actually use."
Local business leaders and state lawmakers have said WMECO's last rate hike a few years ago was a contributing factor in four paper mills closing in Lee two years ago, causing more than 200 people to lose their jobs.
WMECO distributes electricity to 200,000 homes and businesses in 59 communities in the four counties of Western Massachusetts.
WMECO President Peter J. Clarke told The Eagle last month that the hike is necessary because of declining revenues, the failure to meet state reliability requirements, deferred costs from several major storm cleanups, a need to train replacements for an aging work force, and customer demand for better service.
State Attorney General Martha Coakley last week called the rate hike proposal "excessive," and said the utility company is required to justify why such an increase is necessary.
WMECO customers simply view the rate hike as nothing more than a corporate money grab.
"WMECO just wants to make big profits," said Patricia O'Donohue, of Pittsfield. "Despite our efforts to conserve electricity, our bills stay the same or go up just to satisfy [utility] investors."
Irene Placido, of Pittsfield, said WMECO increasing its rates will only discourage users from conserving energy.
"If I choose to turn off my air conditioner in 90-degree heat or put up a solar panel, it's just a waste of money," Placido said.
What's next ...
Final public hearing on WMECO rate hike request is Thursday, 7 p.m. at Springfield City Hall.
Written comments on the utility's filing to the state Department of Public Utilities are due by Sept. 3. Comments can be submitted via mail to: 1 South Station, Boston, MA 02108; or by e-mail to either firstname.lastname@example.org or email@example.com.
If the DPU approves the rate increase, it would take effect Feb. 1, 2011.
"WMECO electric bills to rise by 5%"
By Tony Dobrowolski, Berkshire Eagle Staff, December 2, 2011
PITTSFIELD -- Western Massachusetts Electric Co. customers will see electricity delivery costs drop in 2012, but overall utility bills will increase by about 5 percent for residential and commercial users.
If approved by the state Department of Public Utilities, a 3 percent decline in delivery rates will partially offset a proposed increase in supply rates for customers who choose to purchase electricity through WMECO.
But the increase in energy supply rates means customer's overall utility bills are expected to increase about 5 percent, or $5 per month, for the average WMECO customer who uses 700 kilowatt hours of energy, said utility spokeswoman Sandra Ahearn.
Buying energy from a competitive supplier at a lower price than WMECO's basic rate could result in an overall decrease in utility bills.
WMECO is required to provide electricity to customers who don't buy power from a competitive supplier.
"WMECO will still deliver the electricity. That's still our role," Ahearn said. "But you can choose a competitive supplier for the generation portion of your bill."
WMECO lists licensed electricity suppliers in Massachusetts on its website. Those suppliers serve mostly commercial and industrial clients, Ahearn said.
"The most recent competitive bidding process for electric supply is showing at least a temporary increase in the price of electricity after a prolonged period of decline in prices," said WMECO's President and CEO Peter Clarke in a statement.
"The increase in price is likely a reflection of seasonality," he said, "and we encourage customers to shop for a competitive supply price."
The decline in delivery rates for WMECO customers on basic service will take place on Jan. 1, while the increase in supply rates goes into effect on Feb. 1.
From Jan. 1 to June 30, residential customers who receive basic service will see a supply rate of 7.741 cents per kilowatt hour, up from 6.998 cents from the previous six-month period.
Small commercial and industrial customers will see their supply rate rise to 8.264 cents per kilowatt hour from 7.498 cents from the previous six months.
Both of those rate increases are over 10 percent. But Ahearn said customers' overall utility bills won't increase to that level because of the cut in the delivery rate. WMECO utility bills consist of two main portions: delivery and supply.
Rates for WMECO's residential and small commercial and industrial customers change twice a year, in January and July.
"National Grid customers, lawmakers charged up over rate increase"
By Clarence Fanto, Special to The Berkshire Eagle, 10/01/2014
A sharp spike in winter season electricity charges announced last week by National Grid, which does not generate power but delivers it based on outside market prices, is drawing fire from Berkshire County customers.
The 37 percent increase over last winter's prices, based on expected tight supplies of natural gas that fuel electricity-generating plants, could increase a typical Berkshire homeowner's bill by as much as $100 a month during January and February. The rate hike from November to May represents a 49 percent surge over current rates, said Jake Navarro, a National Grid spokesman.
"This is going to hurt everyone; individuals, families and businesses," said state Rep. William "Smitty" Pignatelli, D-Lenox. Most of his district is served by National Grid. "Time to circle the wagons and fight this," he urged readers of his Facebook page.
But, interviewed Monday, Pignatelli acknowledged that state lawmakers have no say over electricity rates.
"Here we are, the economy's turning around, and we're going to sock people with another unforeseen cost," he said.
He also warned of the potential impact on employers, pointing out that the last major increase in 2006 helped drive Schweitzer-Mauduit International, owner of four paper mills in Lee, out of the area two years later at a cost of 165 local jobs.
Large commercial and industrial customers will see a rate increase of 75 percent, the state's Executive Office of Energy and Environment confirmed, averaging out to $19,000 a month.
"These increases are killing small businesses like my husband's store," Andrea Harrington wrote on Facebook. Her husband, Tim Walsh, owns the popular Public Market in West Stockbridge.
Last winter, some Berkshire residential customers saw electric bills exceeding $300 a month. The "sticker shock" stems not only from inadequate pipeline capacity in the New England region but also from the shutdown of coal-burning plants and nuclear installations such as Vermont Yankee, according to Dan Dolan, president of the New England Power Generators Association.
As Great Barrington financial planner Tom Sirois put it, "We cannot have our cake and eat it too. We cannot over-regulate coal plants nor nuclear plants (resulting in closing) and expect the result to be positive to our pocketbook. Maybe a little less regulation and a little less environmentalism would ease things up."
In view of new pipeline proposals from Kinder Morgan's Tennessee Gas Pipeline Co. and other suppliers, Pignatelli raised the question of "corporate collusion, that they're all working on this together to say, ‘give us the pipeline and rates will go down.' It makes me wonder."
Also wondering is Lenox Select Board Chairman Channing Gibson. "Interesting timing, blaming the higher prices on lack of pipeline capacity right as Kinder Morgan pre-files with the Federal Energy Regulatory Commission," he declared. Suggesting "more corporate fear-mongering," he challenged the need for a new pipeline route through Western and Northern Massachusetts.
National Grid, which serves 17 of Berkshire County's 32 communities -- including North Adams, Adams, Great Barrington and most of Lenox -- has no control over the price charged by electricity suppliers, Navarro explained. "Even though the issue is out of our control, we're concerned over what this means for our customers," the company's spokesman said in an Eagle interview.
The state Department of Public Utilities (DPU) approved the increase last week. "We have to file with the state to make sure our customers are protected and regulations are being followed," Navarro said. Those regulations ensure that utility suppliers such as National Grid have sought competitive bids from power-generating companies.
The DPU does not set the prices for basic services on the supply portion of customers' bills, said spokesman Amy Mahler, of the state's Energy and Environmental Affairs office. But the DPU does review and approve the competitive bidding process, she added, and also controls the distribution portion of the bill.
Western Massachusetts Electric Co., which serves the rest of Berkshire County, including Pittsfield, Dalton and Lee, plans to file its rate-increase plan with the state in mid-November, ahead of a winter-season rate adjustment that takes effect Jan. 1.
The increased cost of power purchased by National Grid is passed on to customers, said Navarro, and yields no profit. The "delivery" portion of the bill covers the company's costs and profit margin, he added.
National Grid recommends budget plans to spread out customers' bills equally through the calendar year.
Discounts are available to customers at certain income levels. "We encourage them to apply," said Navarro. Information: 1-800-322-3223.
"The anticipated basic service rate increases for electricity customers highlight the need for our continued aggressive investments in efficiency and a diverse energy mix to maintain energy price stability," according to the Energy and Environmental Affairs office.
"A desire to minimize increases of this size motivated the Patrick administration to work with the Legislature to file the Clean Energy Bill during the last legislative session," the statement continued, "and is why the administration will continue to fervently advocate for similar legislation."
Last July, the state Legislature failed to approve Gov. Deval Patrick's high-profile solar and hydropower bills.
To "circle the wagons," Pignatelli suggested, customers could complain to the Department of Public Utilities (DPU) and the state attorney general's office.
If it's of any comfort, the National Weather Service's Climate Prediction Center predicts a milder-than-normal season from December through February.
Online assistance ...
For pricing by competitive suppliers: www.nationalgridus.com
Fuel bill help for low-income households: www.bcacinc.org
Energy conservation tips: www.mass.gov/eea/winterenergyresources
"Energy Smarts" blog: www.mass.gov/blog/energy
Video help: www.youtube.com/MassEEA
National Grid in the Berkshires...
The following 17 of Berkshire County's 32 communities are served by National Grid: Adams, Alford, Cheshire, Clarksburg, Egremont, Florida, Great Barrington, Hancock, Lenox, Monterey, Mount Washington, New Marlborough, North Adams, Sheffield, Stockbridge, West Stockbridge, Williamstown.
"Troubling gas odor"
The Berkshire Eagle, Editorial, 10/02/2014
The projected 37 percent increase in electricity charges this winter for Berkshire customers is emitting a gassy odor that is causing this significant hike to fail the smell test. We urge the office of the state attorney general to see where the smell is coming from.
Natural Grid delivered the bad news on hikes that could raise the electric bill of a typical Berkshire homeowner by as much as $100 a month during the chilly months of January and February (Eagle, Oct. 1.) The increase would result from anticipated tight supplies of natural gas that fuel electricity-generating plants. National Grid delivers power whose cost to consumers is based on these market prices.
It hasn’t gone unnoticed that this notification comes as Kinder Morgan’s Tennessee Gas Co. is seeking federal approval of a controversial plan to build a natural gas pipeline through the Berkshires. This is where the attorney general’s office comes in to explore the possibility that energy companies are conspiring to scare up support for the pipeline proposal among residents concerned about skyrocketing electricity costs.
The natural gas shortage supposedly triggered by a lack of pipeline capacity should be addressed by the plans of Spectra Energy of Houston and Northeast Utilities, the parent company of Western Massachusetts Electric, to invest $3 billion in the expansion of two existing regional natural gas pipelines.
A recent Boston Globe story told of the efforts of several New England companies, including one in Massachusetts, to create a "virtual pipeline" of natural gas compressed in such a fashion that it can be delivered by trucks and rail. It is possible, maybe likely, that Kinder Morgan’s potentially destructive pipeline could soon be rendered as irrelevant as a Blockbuster video store.
Contributing to the rise in electricity prices is the steady decline of New England’s nuclear power capacity, and while high-profile accidents have given nuclear a bad name it is in general far easier on the environment than is, for one example, coal. Washington, D.C.’s failure to select a nuclear waste depository site has stalled the nuclear power program, which is depriving the nation of a desperately needed alternative to a fossil fuel industry whose behavior is not exactly earning it the trust of consumers here and elsewhere.
"Martha Coakley aims to blunt effect of electric rate hike"
Berkshire Eagle Staff, 10/03/2014
BOSTON -- Attorney General Martha Coakley is seeking to ease the effects of National Grid’s sharp hike in electricity bills set to begin Nov. 1 for a six-month period. The increase would spike current bills by nearly 50 percent, sending the rate soaring by 37 percent compared to last winter’s already-high rates.
Coakley, the Democratic candidate for governor, called on the state Department of Utilities (DPU) to reduce "rate shock" and investigate possible action to avoid sudden price increases in the future.
"Electricity prices in Massachusetts are already higher than the national average, so this dramatic increase in National Grid’s rates is an extraordinary undertaking for families and businesses across the state who cannot continue to absorb these rising costs," Coakley said in a prepared statement.
"We request that the DPU examine ways to smooth out this impact, and consider deferring all or a part of the rate increase to a more flexible and affordable time period for customers."
In a letter to the DPU released Thursday, the AG’s office suggested that the agency work with National Grid to see if some of the upcoming rate increase could be deferred until the May 1-Oct. 31 billing period next year.
National Grid already offers a budget plan to customers who request it, averaging out bills over a 12-month period by providing a uniform monthly rate.
Coakley is also proposing a one-month extension of a state law banning utilities from cutting off power or gas supplies to customers unable to keep up with heating bills between Nov. 15 and March 15.
The attorney general’s office urged the DPU to review competition in the supply market and utility management procedures to help reduce rate hikes in future winters.
The DPU, a division of the state office of Energy and Environmental Affairs (EEA), approved National Grid’s rate-hike request on Sept. 23, and the utility announced the increase the following day.
EEA spokeswoman Amy Mahler told The Eagle last week that the DPU has no jurisdiction over, nor does it set the prices for the basic services supply portion of customers’ bills. Utilities such as National Grid bid for electricity supplies on the open market. Prices soared recently because of expected natural-gas shortages during the coldest months.
However, the DPU does review and approve the competitive bidding process, Mahler said, and also controls the distribution portion of the bill.
Western Massachusetts Electric Co., which serves 14 Berkshire County communities, including Pittsfield, Dalton and Lee, plans to file its rate-increase plan with the state in mid-November before a winter-season rate adjustment that takes effect Jan. 1.
National Grid services 17 communities: Adams, Alford, Cheshire, Clarksburg, Egremont, Florida, Great Barrington, Hancock, Lenox, Monterey, Mount Washington, New Marlborough, North Adams, Sheffield, Stockbridge, West Stockbridge and Williamstown.
"Bulk-purchase agreement to help save some National Grid, WMECO customers money"
By Clarence Fanto, Special to The Berkshire Eagle, 10/03/2014
Help is on the way for electricity customers in North Adams, Dalton, Lenox, Williamstown and six other Berkshire towns socked by the planned surge in rates for six cold-weather months -- a 37 percent increase from National Grid, and an expected similar spike from WMECO.
Thanks to a bulk-purchase agreement by 10 Berkshire towns from the Colonial Power Group, a community-choice power supply manager, basic-service customers, some commercial and a few industrial consumers will still feel the pain, but less of it.
To sweeten the deal, customers in those communities don't have to do a thing -- they will be automatically shifted to the so-called "municipal aggregation" lower-rate plan in their towns, unless they choose to decline.
Instead of the dreaded 37 percent National Grid overall increase, bills in the 10 communities will go up by about 24.3 percent from November to May -- unless consumers "opt out." All details will be explained in mailings from each town that were sent out this week.
Colonial negotiated on behalf of each town for electricity supply from Northampton-based Hampshire Power, which buys in bulk and relies in part on renewable energy produced in New England.
Hampshire Power is a unit of the Hampshire Council of Governments, which replaced county government in the Pioneer Valley.
Todd Ford, the council's executive director, told the Daily Hampshire Gazette that the agreements reached to supply area communities as well as cities such as Lowell in Eastern Massachusetts are "historic."
"The towns have brought choice to consumers," declared Mark Cappadona, an owner of Colonial Power Group, creator and manager of the plan. "They get to decide whether they want to stay with basic service, join the program, or choose some other supplier. It's a huge bonus for the residential customer."
Consumers will still get service and maintenance -- the "distribution" part of their bills -- from their utility supplier. They can decide to withdraw from their town's program in the future or join it later.
"National Grid is still your company," Cappadona explained at Wednesday night's Selectmen's meeting in Lenox. "But they no longer make any revenue on the supply side." Customers will get their customary bills from the utility, but will see that their supply comes from Hampshire Power.
The agreement was negotiated and completed when competing bids from several suppliers were opened at a meeting of town managers and administrators in Dalton two weeks ago. Voters at town meetings in 2012 had approved joining the program, which also had to be sanctioned by the state.
The 10 communities that will benefit from the deal are Clarksburg, Dalton, Florida, Lenox, New Marlborough, North Adams, Sheffield, Tyringham, West Stockbridge and Williamstown. All are National Grid towns, except Dalton and Tyringham, which are in WMECO territory, as is the village of Lenox Dale.
Lanesborough, also served by WMECO, has a separate agreement in place with Colonial. Other communities, such as Pittsfield and Lee, are not part of the agreement.
Customers in Dalton, Tyringham and Lenox Dale will get mailings in November, offering similar savings over whatever the utility decides to charge for wintertime supplies. The new WMECO basic service rates would kick in Jan. 1, while National Grid's go into effect Nov. 1.
"A lot of times in municipal government, we're often victims of things that are beyond our control," said Lenox Town Manager Christopher Ketchen. "This is one example where the local government can step up on behalf of citizens and take some of the edge off that."
"It's a one-year deal," he told The Eagle on Thursday, "but we'll do this again. I expect this pattern to continue annually."
The contract for "aggregated supply" program organized by Colonial Power Group yields rates significantly lower than those approved by the state's Department of Public Utilities for National Grid.
National Grid customers will be paying 16 cents per kilowatt hours, while ratepayers in the 10 communities on the municipal program will see 12 cents per kilowatt hour on their bills -- a savings of 25 percent. WMECO rates that start Jan. 1 have not yet been announced.
The typical Berkshire homeowner uses about 750 kilowatt hours per month on average year-round, but in the dead of winter, that monthly consumption can soar to 1,000 kilowatt hours or more as furnaces and boilers run nearly around the clock.
At a minimum, customers on the municipal program will save $30 per month compared to the National Grid rate. But they'll still be paying considerably more than they did last winter -- $70 more for the heavier users, compared to $100 more from National Grid.
"It's less bad news," Cappadona stated, noting that the entire New England region is being hit by higher electric rates "like we've never seen."
On the Web: Detailed information is available at www.colonialpowergroup.com.
At a glance ...
Here are some frequently asked questions about the group power-supply deal negotiated by 10 Berkshire towns on behalf of residents as well as some commercial and industrial customers:
How does our electricity service work now?
The big utilities have two major roles in electricity: Delivery and supply. They are listed and priced separately on your National Grid or WMECO bill. The utilities maintain the poles and big power lines (delivery), and they also arrange the purchase of the actual power (supply).
How will this new program affect me?
You will receive the benefit of a lower rate on your electricity and therefore a lower electric bill. Otherwise, you will not notice any change. The only difference you will see is that the name of Hampshire Power will be printed under the "Supply Services" section of your monthly bill. You will continue to receive one bill from your local utility -- National Grid or WMECO. You will continue to send monthly payments to your local utility. Your local utility will continue to read meters and maintain the distribution and transmission lines. You will continue to have all existing consumer rights and protections.
What if my power goes out? What if a tree falls on a power line?
National Grid or WMECO will continue to provide all delivery services. All emergencies will continue to be their responsibility.
How much will the municipal bulk-purchasing agreement cost our town?
Nothing. All costs will be paid by the Hampshire Council of Governments.
Have other towns done this successfully?
Yes, 21 towns on Cape Cod and Martha's Vineyard; the city of Marlborough; the city of Lowell; nearly 40 municipalities in several Western and Central Massachusetts counties are on board.
What do I have to do to participate in the program?
You do not need to take any action. All basic service consumers will automatically be enrolled. Those who have already chosen a different supplier will not be enrolled. Existing budget plans or eligible low-income discount rates will continue for anyone enrolled in the program.
What if I do not want to participate?
The law allows anyone to opt out within 30 days of the mailing from each town and choose another supplier or remain with their utility. There will be no charge to opt out. All consumers have the right to choose their own supplier. Customers can opt-out either by returning a postcard or online at www.colonialpowergroup.com. They can call Colonial at (866) 485-5858 at any time to withdraw from the program.
Sources: Colonial Power Group; Hampshire Power; Hampshire Council of Governments.
"Crying foul over cost of power"
By Clarence Fanto, Special to The Berkshire Eagle, Op-Ed, 10/05/2014
It was a tough week for customers of National Grid, the power company that serves 17 Berkshire communities. Residences and businesses that hook up to WMECO will have their turn to voice outrage in about six weeks when that utility releases its January to June 2015 rates.
"Rate shock" is what Attorney General Martha Coakley called the exorbitant spike in electricity delivery rates that National Grid will be billing in November through April. The Democratic candidate for governor is in a tight race against Republican Charlie Baker, but she probably would have pushed back anyway.
It will be fascinating to see if the utility accepts her proposal to spread out its rate increase over the next 12 months, easing the blow to customers’ checkbooks during the peak-usage winter season. I wouldn’t bet on it, but hope I’m wrong.
We’ve heard the "c" words -- conspiracy and collusion -- used by some folks, including a few government officials, who question the "coincidence" of the power company’s 37 percent increase in cold-weather delivery rates, compared to last winter, blaming it on anticipated tight supplies of natural gas.
Odd, they say, that this coincides with energy giant Kinder Morgan’s push for a new 250-mile Tennessee Gas Co. pipeline to carry hydrofracked, high-pressure natural gas through the county and across the state to customers such as Berkshire Gas and, yes, National Grid.
Why did the state Department of Public Utilities rubber-stamp the rate hike, people wonder.
The answer, according to officials from the state Energy and Environmental Affairs office, is that the DPU has no control over the supply side of the utility bill.
That’s fueling the overall price spike, covering the purchase of power from electricity generating companies which complain that the shutdown of the Vermont Yankee nuclear plant and a North Shore coal-generating plant is leading to a potential shortage because there’s not enough natural gas available to compensate. All the DPU does, according to the state, is to make sure that power companies bid for the best-possible price from competing electricity providers.
National Grid’s officials point to an expected natural gas shortage in New England, though not specifically in Berkshire County. In upstate New York, where existing pipelines already provide an ample supply, the utility expects customers will see bills that are 9 percent lower than last winter’s -- even though the company took a $945 million hit because of a new software system that was highly flawed.
What’s more, the utility’s spokespeople state, it makes no profit on the supply side of the bill, simply passing along to customers the going rate for electricity from regional power generators. The profit and cost of doing business comes from the other half of the bill, the "delivery" portion that covers the transmission and maintenance of power lines and hookups to homes and businesses.
It’s all very complex, so it’s not surprising that many customers are crying foul and demanding to know "the rest of the story." Sad to say, we can provide no easy answers here.
But we can praise the Berkshire communities whose leaders had the foresight to see all this coming, and to partner up for a bulk purchase of electricity supply from Colonial Power Group at a 25 percent lower rate than National Grid is now charging. National Grid will remain responsible for transmission and final delivery, so if a line goes down, that’s who you’re gonna call.
Residents and some businesses in close to a dozen towns and one city -- North Adams -- will see some benefit, compared to their neighbors in 20 towns and one city -- Pittsfield -- that did not go this route.
There will still be pain at bill-opening time, only somewhat less of it. We know some folks who were paying $300 a month for electricity at the height of last winter’s especially costly heating season. This winter, if they use the same amount of power, they’ll write checks for $375 a month, instead of National Grid’s $411, enough of a savings for one fill-up at the gas station.
But every bit helps, and folks who live in the communities that didn’t go through the two-year process to sign up for bulk purchases have the right to ask their mayor, town manager or Select Board why they didn’t join the discount club.
More power to Coakley in her effort to rein in the utilities. But, to cite the 1967 Stephen Stills lyric performed by Buffalo Springfield in a very different (wartime) context -- "There’s something happening here, what it is ain’t exactly clear."
"WMECo's 29 percent rate hike to take effect Jan. 1"
The Associated Press, 11/21/2014
BOSTON (AP) - State regulators have approved a 29 percent rate increase sought by Western Massachusetts Electric Co., which serves about 200,000 customers in Western Massachusetts, including more than a dozen communities in Berkshire County.
WMECo has said the rate increase would take effect Jan. 1 and remain in effect for six months. It would raise the average residential customer's bill by about $26 a month.
The increase was approved Friday by the state Department of Public Utilities.
WMECo had sought it to offset its costs in competing for the natural gas it uses to generate electricity. Natural gas supplies have in tight supply in New England.
In September, Massachusetts regulators approved a 37 percent rate increase for National Grid's 1.3 million electric customers. That amounts to about $33 a month for that company's typical residential customer.
"Eversource, formerly WMECo, customers react with shock to first bills under new rates"
Based on 500 kW usage, average increase to household is $26
By Dick Lindsay, The Berkshire Eagle, February 12, 2015
PITTSFIELD - Local customers of Eversource Energy are shocked by what they say are exorbitant electric bills — at least double in some cases — compared to the utility's projection under a recent rate hike.
As of Jan. 1, Eversource, formerly Western Massachusetts Electric Co., imposed a 29 percent increase in the cost of the actual electricity it provides to about half the communities in Berkshire, Hampden, Hampshire and Franklin counties. Based on 500 kilowatts, the average household monthly bill rose from $90 to $116, according to utility officials.
Delivery charges, how the electricity reaches homes and businesses, remained unchanged.
Susan Healey was among dozens of Eversource users taking to social media on Thursday disputing the $26 hike.
"What I know to be true is that many of my friends are seeing electric bills nearly double, some as high as $647.00 for one month from a local family that fosters children," Healey posted on her Facebook page. "My own bill increased by $168 in one month which is significantly higher than the misrepresented anticipated impact that we expected."
Healey is gathering names for an online petition calling on the state Attorney General's office to appeal the state-approved rate hike. While supply costs aren't regulated, AG spokesman Christopher Loh said the state's top prosecutor can appeal such rate hikes, if the utility failed to buy electricity at the best possible price.
"For example, if we found that a utility did not ensure a competitive bid process or did not take the lowest bid it could have, then we have grounds to appeal," he said.
Loh noted state regulators have more control over proposed increases in electric company delivery rates and infrastructure costs.
Without seeing specific bills, Eversource officials are stumped by some customers' claims of skyrocketing electricity costs. Spokeswoman Priscilla Ress urged customers to re-examine their bill and make sure they liken the January 2015 cost to January 2014, a more accurate comparison than going from month to month.
"And with these wicked [cold] temperatures chances are folks are indoors longer and using more electricity," she said. "The lights are turned on earlier; perhaps when people are house-bound they're using their electronics more, or perhaps running a space heater that is running up the electric bill."
Ress added that those who heat with electricity would likely notice a bigger bill than those who don't.
Nevertheless, nearly 50 customers — and counting — of Eversource, as well as National Grid, the Berkshires' other major electricity provider, posted Facebook messages on Thursday of how higher electric bills have put a huge dent in their budgets.
"It ate up my SS [Social Security] increase, and then some," said Jean Goodell Floyd.
As for conservation efforts, Karen McFee posted that it's been fruitless at her house.
"We have two [wood] pellet stoves, we turn things off and try to conserve yet still [our bill] is around $400-$420, seems a lot more than 37 percent increase," said the customer of National Grid
In November, National Grid, the area's other major electricity provider, jacked up the supply cost of electricity by 37 percent — an increase that means zero profit, according to utility spokesman Jake Navarro.
"Customers pay the same price for power that we pay," said Navarro. "We don't make any money on what we purchase."
Several irate homeowners felt higher electric bills will continue to decimate the county's population.
"This is part of what is driving people out of the Berkshires," Carol LePrevost of Lee said on Facebook. "Guess it's time to move south!!!!!!!!"
Contact Dick Lindsay at 413-496-6233. firstname.lastname@example.org @BE_DLindsay on Twitter
• Replace five lights with Energy Star-rated light bulbs; total savings of $9 per month.
• Buying Energy Star-rated appliances can save $11 per month.
• Turn off lights, appliances, TVs, stereos and computers when not in use; monthly savings $9
• Unplug electric space heater or hot tub; monthly savings of $41.
• Unplug chargers, laptops, anything with remote control or "instant on" features; monthly savings $4.
• Washing clothes in cold water can save $9 per month.
• Repair leaky faucets tied into electric hot water heater; save $6 each month.
• Clean electric dryer filter; clean and straighten the exhaust hose/duct and vent outside. Monthly savings of $3.
Source: National Grid US
“Legislature once again caves in to utilities”
The Berkshire Eagle, Letters, November 25, 2015
To the editor:
The Massachusetts Legislature has once again sold out on renewable energy and cashed in to the tune of utility company profits. The Legislature failed to lift caps on solar net metering during its final session of the year.
A federal solar incentive expires at the end of 2016, and net metering caps have already been hit in National Grid territory and are close to being hit in other utility territories such as Eversource's, stalling solar projects that will create new jobs and clean energy.
In Massachusetts, developing technology and improving efficiency are driving costs down; utility-scale contracts are at less than $0.05/kwhour (seia.org). According to a story published by Eyewitness News on March 6, Eversource CEO Tom May received a $1.3 million pay raise from 2014, to a total of $9 million. Yet when asked why it was raising rates, Eversource claimed that it had nothing to do with May's raise.
Eversource and National Grid have no trouble lying to consumers about raising their rates to subsidize CEO pay increases, but when it comes to developing renewable energy sources that cost less than 5 cents a kilowatt hour, they're all of a sudden concerned for their ratepayers? If you buy that line, then quick, grab your wallet. I've got something I would like to sell to you.
The lobbying efforts of utility companies such as Eversource and National Grid seem to have succeeded again, for now. Climate scientists agree; the time to act is NOW; we shouldn't limit clean energy, but move forward to 100 percent renewable energy. The inability of our legislators to act shows the depth of corruption in our political system.
They claim that they're concerned for the rates of electric customers, but just remember, our legislators are not doing it because it will save you money. They're doing it to save guys like Tom May and companies like National Grid and Eversource a pretty penny.
Christian Kennedy, Pittsfield
“Eversource rate request pilloried at Department of Public Utilities hearing”
By Larry Parnass, email@example.com – The Berkshire Eagle, August 1, 2017
PITTSFIELD — Electricity customers pleaded Tuesday for relief from a "greedy" company pursuing a rate increase they said will threaten businesses, pinch households and costs jobs.
As they did at an April hearing, elected officials and everyday citizens gathered at a public hearing before the state Department of Public Utilities to blast a rate increase request from Eversource Energy.
"The company, its shareholders, they're getting along just fine, just fine, without putting additional burdens on we the residents of Berkshire County," said state Rep. Tricia Farley-Bouvier, D-Pittsfield. "And I can tell you, we are not getting along just fine."
The company is asking the DPU to grant it a nearly $96 million rate increase in two phases starting Jan. 1, as well as new mechanisms that will add hundreds of millions of dollars in costs in the years ahead.
The DPU ordered a second public hearing in the rate case after Eversource adjusted its proposal June 1. It drew an audience of more than 80 to Berkshire Community College.
"We cannot keep going to consumers who are on fixed incomes and pull money from their pockets," said Thomas Wickham, a Select Board member from Lee.
Ed Davis, director of rates for Eversource, said the company adjusted its rate request in response to comments and was provided "significantly smaller increases" than proposed in January for Western Massachusetts.
Officials still slammed the request as unacceptable. Pittsfield Mayor Linda Tyer reeled off statistics about her city and told DPU Commissioner Celeste M. Fraser and Hearing Officer Marc Tassone residents will pay twice for what she termed the company's "obscenely greedy rate increase" — in their electricity bills and in taxes.
Tyer said the company's revised proposal would add more than $736,000 in yearly costs to power more than 100 municipal buildings and illuminate streetlights.
"Please reject this extraordinary rate increase," Tyer told the DPU panel.
Tyer and other elected officials took aim at Eversource's strong financial condition, saying the company makes enough money.
Mike Durand, the company's manager of media relations for Massachusetts, said in an interview outside the hearing that people should be pleased the company is doing well because it benefits them as well. By having a strong balance sheet, the company was able to invest to improve reliability of the distribution system, he said.
But through more than two hours of testimony, speakers insisted Eversource is doing well enough financially. Several endorsed last month's call from Attorney General Maura Healey for the DPU to reduce the company's rates.
Farley-Bouvier noted that one Eversource executive makes nearly $25,000 a day. According to the U.S. Census, the per capita income in Berkshire County was $30,469 in 2015.
"I think that is a stark comparison," Farley-Bouvier said.
State Sen. Adam Hinds, D-Pittsfield, said an increase in rates will exacerbate economic disadvantages in the Berkshires.
"I personally find this absolutely unacceptable," Hinds said.
He called on the DPU to ensure that all state residents stand an equal chance of getting ahead, "regardless of where they are based."
State Rep. William "Smitty" Pignatelli, D-Lenox, said the rate increase, even as adjusted, benefits shareholders at the expense of struggling people and businesses in the Berkshires.
"I ask that you reject any increases in rates," he told the DPU representatives.
Pignatelli reminded the panel that when rates shot up in 2007, two south county paper companies went out of business, costing hundreds of jobs.
He said concerns about the rate increase is holding back hiring. And he said it threatens people on fixed incomes.
"I don't want to see people like my 93-year-old parents put in peril because they can't afford their electric bill," he said.
Representatives of two paper companies — Onyx Speciality Papers in South Lee and Crane & Co. in Dalton — cited dramatically higher power costs.
Christopher Mathews, an executive with Onyx, said the company stands to pay 35 percent more for electricity in 2018 than it did in 2016. That will impede its ability to compete against companies with lower energy costs.
Brendan Ronayne, senior finance manager for Crane, said the firm faces a $100,000 increase in electricity costs, a 10-percent jump.
The company, with over 300 employees, holds fixed-price contracts with the government to produce currency paper. Having to cover higher electricity costs limits its ability to invest in its employees and the region, he said.
Jonathan Butler, president and CEO of the 1,200-member business group 1Berkshire, said he remains "adamantly opposed" to an increase that would hurt large employers in particular. Even the new proposal would drive costs up 25 percent for some commercial and industrial customers, he said.
"This overall rate proposal is an unacceptable new burden," Butler said, and would set back efforts to expand the job base through existing companies.
Gerard Cote testified on behalf of the Western Massachusetts Labor Action, whose members rallied outside to oppose the rate increase.
Cote challenged the DPU to live up to a pledge to ensure access to affordable electricity. "The only acceptable rate hike is no rate hike," Cote said.
Another member of the labor group, Janet Viselli of Pittsfield, said people are struggling to pay household expenses.
"What are we going to pay for and what are we not going to pay for?" she asked. "People's lives are on the line here."
The DPU will continue to take public comments in writing through August, then hold evidentiary hearings in September. A decision on the rate case is due before the end of the year.
Reach staff writer Larry Parnass at 413-496-6214 or @larryparnass.
Our Opinion: “Eversource hasn't yet made its argument”
The Berkshire Eagle, Editorial, August 4, 2017
The controversy surrounding Eversource Energy's rate hike request before the Department of Public Utilities can be characterized as a "failure to communicate." It's a failure to explain to business, public and residential electricity users why Eversource needs nearly $96 million more in 2018 to ensure a satisfactory return on investment for its shareholders. Equally important, it has failed so far to convince the DPU, which stands in for the people as overseer.
At a public hearing before the DPU last Tuesday (Eagle, August 2), individual ratepayers, business operators and local politicians made their displeasure known, raising among other points that Eversource is already doing quite well and is not — in their opinion — in need of such a drastic rate hike. They have plenty to be concerned about. Not only will the proposed hike raise rates by approximately 10 percent next year — a heavy hit by itself to residential users on fixed incomes — the increase in overhead for local businesses will create a catastrophic ripple effect in terms of job loss, lack of expansion, and a further battering to an already struggling local economy. The loss of two South County paper companies and hundreds of jobs due to a stiff increase in 2007 still stings, and last Tuesday representatives from two large local employers, Onyx Specialty Papers and Crane & Co., described in explicit terms how the proposed increases would depress future hiring.
Cities and school districts, faced with the same increases, would have to lay off more public employees and teachers, along with delivering a "double hit" to customers by having to increase property taxes to keep the lights on.
It is possible that Eversource can mount a legitimate case for the increase. After all, fuel, maintenance and construction costs rise for utilities just as they do for the rest of us. So far, though, the company not made a convincing argument, partly due to the fact that it has been less than transparent about the process it arrived at to justify the request. When confronted, it has presented complicated and mystifying formulas that obfuscate rather than clarify. It has also failed to credibly explain why an undue portion of the hike's per-capita burden lands of Western Massachusetts residents.
There is evidence that Eversource is listening to the public outcry. After a contentious hearing before the DPU last April, the company adjusted its proposal downward at the beginning of June. This may just be standard bargaining practice, and even though Eversource is a public utility, the primary fiduciary duty of its leadership must be to its stockholders. No one can blame it for trying to generate as high a profit as it can, which makes the DPU's vigorous and robust oversight in this instance so critical.
Eversource needs to step up with a stronger and more coherent pitch, but if anyone's feet should be held to fire, it's state government, which discharges its duty to safeguard the Massachusetts business climate and the economic well-being of its citizens through its various agencies — including the DPU. With so much at stake for the future of Berkshire County, its citizens and businesses cannot afford to be distracted by fat, easy targets like Eversource. They need to keep their eye on the ball, and keep up the pressure where it counts.
Rather than pocket tens of millions of dollars in savings through a lowering of the corporate tax rate, Eversource will support trimming the rate increase it won just a month ago. Eversource
“Eversource to pass tax savings on to customers”
By Larry Parnass, The Berkshire Eagle, January 2, 2018
Uncle Sam's tax gift to Eversource will be repackaged for its customers, the utility said Tuesday.
Rather than pocket tens of millions of dollars in savings through a lowering of the corporate tax rate, Eversource will support trimming the rate increase it won just a month ago.
"We agree our customers should receive the benefits of the new tax law, so we are voluntarily submitting a filing this week to address this issue," said Priscilla Ress, a utility spokeswoman.
Word of Eversource's action, obtained Tuesday by The Eagle and expected to be detailed Wednesday, comes as the company faces a challenge from the Attorney General's Office to pass the savings along to its 1.4 million customers in Massachusetts, including 200,000 served by the Western Massachusetts Electric Co.
When state regulators weighed an Eversource rate increase over 10 months last year, they gave it a cushion to pay its taxes.
But within days of their Nov. 30 decision, all tax bets were off. The utility's federal tax bill fell by an estimated $74 million after Congress cut the corporate rate from 35 to 21 percent.
That meant it was time for a do-over, the Attorney General's Office claimed.
The office argued in a brief filed with the Department of Public Utilities that the tax savings should go to customers by reducing electricity costs set to take effect Feb. 1 in 19 Berkshire County communities.
"The Department should take immediate steps," the office said in a Dec. 20 filing, "to avoid this major corporate windfall."
State Sen. Adam Hinds, D-Pittsfield, said he remains concerned about the impact that rate increases will have on customers, both households and businesses. He said that since the higher federal taxes were factored in to the rate increase approved by the DPU, the utility needed to act.
"If they don't have to pay the federal taxes, they shouldn't be allowed to profit from them," Hinds said. "This absolutely should be passed on to the consumer."
The utility's move adds one more layer — albeit a welcome one — to an already complicated puzzle.
The Eversource rate case this year was broken into two parts. The part yet to be announced concerns how the utility can apply the rate increase it was granted Nov. 30 to its customers in either its WMECO or NSTAR Electric Co. units.
That means customers still don't know the precise impact on their monthly bills when increases go into effect Feb. 1.
If it had not elected to forgo the new tax benefit, Eversource would have had to oppose a move by the attorney general Dec. 20 to reopen the rate case.
Attorney General Maura Healey said she acted out of a belief that the federal tax break belongs to "the American people."
"We're taking this action to ensure that the companies use these corporate savings to lower rates for Massachusetts customers instead of lining their own pockets," Healey said in a statement.
As of Tuesday, DPU commissioners had not decided whether to reopen the rate case, which awarded Eversource an overall $37 million increase in the first year and set it on a path to receive 3.5 percent increases over the next four years.
Of that increase, $25 million would be paid by WMECO customers.
The DPU award cut Eversource's rate request by one-third for its WMECO operations; Healey had opposed any increase.
Ress, the Eversource spokeswoman, said the company planned to explain its response in a DPU filing. It remains to be seen whether the utility will allow the entire tax savings to be removed from its rate increase.
At the same time, on another front, the Attorney General's Office has appealed the DPU's decision to allow Eversource to earn a 10 percent rate of return on equity.
That complicated measure refers to how much money regulators let a utility earn for its shareholders.
It remains a point of contention.
During the rate case, all expert witnesses, except those called by the utility, called the company's request for a 10.5 percent rate of return on equity excessive.
The Attorney General's Office, which recommended an 8.875 percent rate of return, claims that the DPU neglected to properly explain why it granted the higher rate.
By not justifying its decision, the office said, the DPU failed to provide transparency and its action "threatens the integrity of the regulatory process." The appeal will be heard by the Supreme Judicial Court.
State Rep. William "Smitty" Pignatelli, D-Lenox, said electricity customers deserve a break.
"I'm extremely pleased that the Attorney General is keeping the heat on, no pun intended, with the Eversource rate case," Pignatelli said.
He and other local lawmakers have argued that the cost of electricity is imperiling the region's economy.
"The Berkshires have a fragile year-round economy, and the costs of electricity will be crippling to many of our larger businesses," Pignatelli said. "We can't be putting businesses in the position of choosing between finding ways to hire more people or deciding to lay people off in order to pay the electric bill."
The AG's move to help ratepayers is also backed by the leader of the state Senate.
"Taking this action is about protecting consumers, and is in the best interests of families across Massachusetts," said acting Senate President Harriette L. Chandler, D-Worcester.
"I applaud the Attorney General's leadership on this issue," Chandler said.
The $1.5 trillion tax bill President Donald Trump signed into law Dec. 22 will save WMECO more than $8 million a year, according to estimates filed by the attorney general with the DPU.
In its Dec. 20 brief, the attorney general asked the DPU to reduce WMECO rates by $11.8 million and the NSTAR Electric Co. rates in Eastern Massachusetts by $62.2 million.
The reduction the attorney general seeks for WMECO customers represents a 50 percent cut in the rate granted Nov. 30.
In the brief he filed with the DPU, Assistant Attorney General Joseph W. Rogers cites a precedent for reopening rate cases.
It came in 1986, when President Ronald Reagan signed a tax bill that reduced the corporate rate from 46 to 34 percent. At that time, the DPU opened an investigation into utility rates in order to pass tax savings through to ratepayers.
A change is warranted again, Rogers writes, to avoid "unjust and unreasonable rates."
In the rate case, WMECO's estimated "cost of service" was $161,048,552. Of that, the Eversource division was expected to pay $14,958,039 in federal corporate taxes, based on a tax rate of 35 percent.
"Unless the Department adjusts the Companies' revenue requirements to reflect this federal income tax reduction, Eversource customers will be overpaying for their electric service by hundreds of millions of dollars," Rogers writes.
"The reduction in the federal corporate income tax rate is an extraordinary circumstance that requires a fresh look at the record for the express purpose of substantively modifying the Department's final revenue requirements decision," he writes.
In its other challenge related to return on equity, the Attorney General's Office will ask the Supreme Judicial Court to vacate the DPU rate decision and order further study to establish that the regulatory agency used facts and was "free from legal error."
Small changes in the allowed "return on equity" trigger higher rates, the office argues.
"Even a change of a tenth of a percentage point to a utility's allowed ROE can be worth millions of dollars in extra charges to customers," the office says in its appeal, signed by Rebecca Tepper, an assistant attorney general in the Division of Energy and Telecommunications.
Eversource supplies electricity to Adams, Becket, Cheshire, Dalton, Hancock, Hinsdale, Lanesborough, Lee, Lenox, New Ashford, Otis, Peru, Pittsfield, Richmond, Sandisfield, Savoy, Tyringham, Washington and Windsor.
Larry Parnass can be reached at firstname.lastname@example.org, at @larryparnass on Twitter and 413-496-6214.
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