The other gift shoe is dropping for Eversource customers who are still waiting to learn how much their rates will be increasing this year.
The company, bowing to a March 20 call by Massachusetts Attorney General Maura Healey, filed Wednesday with the state Department of Public Utilities to cut its allowed rate hike by $8.3 million in Western Massachusetts — reflecting the anticipated savings from the new federal tax law that took effect Monday.
Eversource, which had been granted a $24.8 million rate increase for its western Mass. customers by the DPU on Nov. 30, announced it was voluntarily reducing the size of that hike to reflect the reduction in the corporate tax rate from 35 to 21 percent.
“We believe it’s important that our customers reap the benefit of a lower tax rate,” said Eversource Massachusetts Electric Operations President Craig Hallstrom. “As a regulated power company, our rates are based on our costs, including federal taxes, so if taxes are reduced, ultimately costs are reduced and that benefits our customers.”
The plan for calculating the effect of the remaining $16.5 million increase is expected to be decided by the DPU in coming weeks, with customers seeing the new rates taking effect Feb. 1 and reflected in their February bills. That had been the first piece of good news delivered by the utility, which had originally wanted to see its new rates take effect with the start of 2018, but sought the delay since it would have had difficulty acting on what had been scheduled to be a Dec. 29, 2017 rate distribution decision.
“Given the complexity of the newly enacted law, over the next several months, the company will be conducting a full evaluation by its tax department to calculate the exact amount that will be returned to customers,” Eversource said in a press statement.
Healey’s office pointed out she was the first attorney general in the country to publicly call for across-the-board utility rate cuts following passage of the federal tax law. She said in a statement Thursday, “This tax bill is being paid for by the people of Massachusetts, so the money should go back in their pockets. Our office filed this action to ensure that these savings go to customers. We are glad that Eversource has done the right thing by agreeing to lower its rates and we call on all our state regulated utilities to do the same.”
Before being cut back by one-third on Wednesday, the rate hike was expected to result in a $7.75 increase on the total bill for an average Western Massachusetts Electric Co residential customer using 550 kilowatt hours., the company had said.
Last month, the AG’s Office appealed the DPU’s Eversource rate decision, pointing to the allowed 10 percent shareholder return as one of the nation’s highest allowed by an electric utility regulator. It also urged the DPU to reduce customers’ annual rate increases under Eversource’s five-year rate plan and to reconsider how it treats accounting and recovery of certain vegetation management expenses, saying that would save customers over $40 million.