Healey-led coalition asks for federal utility rate review


Combined Sources
Wednesday, January 10, 2018

Following her call for Eversource to reduce its rate hike reflect the new federal tax law — and the utility’s decision to cut by $8.3 million the Western Massachusetts Electric Company increase that will take effect on Feb. 1 — Massachusetts Attorney General Maura Healey is leading a bipartisan coalition of 18 state attorneys general, state agencies and consumer advocates in urging the Federal Energy Regulatory Commission to take immediate steps to ensure that public utilities don’t get a major corporate tax windfall at the expense of their customers.

The coalition wrote Tuesday requesting a FERC investigation into whether current rates for federally regulated electric, natural gas and oil utilities are justified following the recent passage of the new federal tax law that reduces the corporate tax rate from 35 to 21 percent.

“This new tax bill gives electric, gas and oil companies a major tax break, and unless FERC adjusts the rates, utilities customers will be overpaying for services by hundreds of millions of dollars,” said Healey, the first attorney general to publicly call for across-the-board cuts in state electric, gas and water rates, following last month’s passage of the federal law, said, “FERC needs to act immediately to ensure that customers get these savings.”

The coalition, which also includes attorneys general from Connecticut, New York, Rhode Island, and eight other states, is specifically concerned about the impact the federal law has on the level of corporate income tax expenses that are incorporated into public utilities’ rates and the amount of money utilities hold in reserve to pay future tax bills. Their letter asks FERC to act quickly to make any necessary changes to utilities’ rates to ensure that customers’ bills are reduced, and to set an immediate date for refunding customers for any over-collection resulting from delays.

In 1987, they note, FERC allowed electric utilities to file for rate decreases after President Ronald Reagan lowered the corporate tax rate from 46 to 34 percent.

Healey’s office last month urged the DPU to recalculate distribution rates for all Massachusetts regulated electric, gas and water companies following the tax law’s passage.

Eversource agreed to use the corporate savings to lower rates for its customers, filing last week to reduce the rate hike for WMECO customers to $16 million, instead of the DPU-approved $25 million.

Also sending the letter are the Connecticut Office of Consumer Counsel, the Florida Office of Public Counsel, the Maine Office of the Public Advocate, the New Hampshire Office of the Consumer Advocate, the Rhode Island Division of Public Utilities and Carriers, and the Vermont Department of Public Service.