$106M could return to Mass. rate payers
A payback for overcharging associated with infrastructure investments could result in $106 million returning to ratepayers.
Massachusetts utility ratepayers will receive refunds totaling $106 million if regulators agree to a federal judge's conclusion that transmission companies charged too much for infrastructure investments, according to the attorney general's office.
Administrative Law Judge Steve Sterner's decision reduces the return on equity that companies may earn on transmission line construction investments between 2013 and 2015. In October 2014, the Federal Energy Regulatory Commission (FERC) reduced the transmission owners’ return on equity from 11.14 percent to 10.57 percent, leading to a one-time refund to New England customers of $78 million.
Sterner's decision, also subject to FERC approval, reduces the allowed return, which covers construction costs plus a profit, to 9.59 percent for rates in effect between January 2013 and April 2014. Sterner found the return on equity in effect from July 2014 through October 2015 should have been no higher than 10.9 percent, according to Healey's office, which plans to recommend that FERC further reduce that rate.
"As the ratepayer advocate we are pleased that the administrative law judge agrees that the profits electric transmission companies and their investors are earning at the expense of ratepayers is too high," Attorney General Maura Healey said in a statement on Friday. If FERC agrees with Sterner's ruling, New England ratepayers will be entitled to refunds totaling $234 million.
Energy infrastructure construction costs loom as a major factor as Beacon Hill policymakers weigh a changing power system that will rely less on energy generated by fossil fuels and nuclear stations and greater dependence on natural gas, hydropower and offshore wind.
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