Briefing: Utility Rate Cuts
The Department of Public Utilities (DPU) recently issued an order that cut National Grid’s proposed rate increase by 60 percent. The original petitioned increase of $111.3 million was reduced to $67 million, keeping National Grid’s electricity distribution rates as the lowest of any of the state’s four, investor-owned public utilities.
What else was done?
In a separate order, the DPU disallowed NSTAR to collect approximately $33 million from its customers, which the company claimed was its share of benefits associated with customer savings initiatives. Because NSTAR already collected a portion of these savings, the DPU’s order means the utility must return $20 million to its customers.
How will customers be affected by National Grid’s rate cut?
The utility company’s proposal would have increased the monthly bill of a typical Massachusetts Electric or Nantucket Electric residential customer by $4.25. However, the department’s order sets rates that will decrease the typical monthly bill by 36 cents.
In what other ways was National Grid affected?
As part of the DPU order, the utility company can seek a 10.35 percent return on equity based on better company management and in recognition that decoupling rates from sales lowers company risk. By approving National Grid’s proposed decoupling mechanism, the order will advocate for the company’s efforts to promote large-scale energy efficiency programs.
What is decoupling?
Defined in the Green Communities Act signed by Gov. Deval Patrick in 2008, decoupling eliminates the link between company sales for electric distribution service and company earnings. National Grid’s decoupling proposal was the second to receive DPU approval (Bay State Gas Company received approval last month).
What else was approved?
The DPU also approved National Grid’s proposed “inclining block rates,” which reward customers that conserve energy. The utility’s plan for funding infrastructure upgrades was all approved, which will improve reliability in the company’s service territory.
Click here to read the DPU's National Grid order.
Click here to read the DPU's NSTAR order.
WBJ Web Partners
Most Recent
Most Recent
0 Comments