Pittsfield — Officials from the Healey-Driscoll administration were on the hot seat during a public hearing held by the state’s Joint Committee on Telecommunications, Utilities, and Energy on Friday, December 1. The hearing was held by members of the Berkshire County delegation of the committee at the Berkshire Innovation Center.
Testifying at the hearing on behalf of the Healey-Driscoll administration were Commissioner of the Department of Energy Resources Elizabeth Mahony, Massachusetts Executive Office of Energy and Environmental Affairs Secretary Rebecca Tepper, and Department of Public Utilities Chair Jamie Van Nostrand.
According to the press release for the hearing, which was issued by the committee, the purpose of the hearing was “to address the alarming utility company rate increases on electric, gas, and oil that have burdened residents in recent years.”
According to data from National Grid, the current basic service rate for electric customers who are categorized as either Regular Residential or Residential Low Income is 18.213 cents per kilowatt hour (kWh). The price is in effect from November 1 until August 31, 2024, for residents on the fixed-price plan. The price is a decrease from November 1, 2022 to April 30, 2023, when the rate was 33.891 cents per kWh. However, the price is still high compared to the rate from five years ago, from November 1, 2018 to April 30, 2019, when the rate was 13.718 per kWh.
This price does not include additional rates for delivery service for customers, which currently includes a $7-per-month customer charge, 8.421 cents per kWh charge, 4.050 cents per kWh charge, and other various surcharges as listed on National Grid’s website.
Meanwhile, the current fixed rate kWh price for Eversource residential customers, as listed on its website, is approximately 14 cents per kWh, not including any additional customer service surcharges. Surcharges for Eversource residential customers include a $10-per-month customer charge, a $.05243 per kWh distribution energy charge, and other assorted surcharges and fees.
Eversource supplies the electricity for several towns in Berkshire County, including Lee, Tolland, Becket, Otis, and Washington, while National Grid services the remaining towns, and Lenox has multiple electric providers.
While prices of electricity were discussed at the hearing, members of the Healey-Driscoll administration also discussed natural gas prices, the status of renewable energy in the state, and emission goals as they relate to the state’s Clean Energy and Climate Plan. The plan calls for a substantial greenhouse gas emissions limit by 2025 for multiple state sectors, including residential, commercial, and industrial sectors. “Our job now is to implement [the goals in the plan] while ensuring reliability, resiliency, and affordability for customers,” Tepper said towards the beginning of the hearing. “For the last several years, we’ve collected a lot of data. We have targets and we have plans, and we’re focused on implementing those plans in an equitable way, particularly for the clean energy transition [part of the plan]. We’re spending a lot of time thinking about what that means and how we can achieve that. It’s going to require us to procure new energy resources, modernize our infrastructure, and ensure that we have proper training for the workforce.”
When it comes to energy prices, “during the winter, our overreliance on natural gas makes us sensitive to the global markets,” Tepper said. “That’s what happened last winter when we had price spikes due to global events,” she explained. “The war in Ukraine primarily led us to higher prices for everybody in their homes, because we’re subject to that global market. When natural gas prices go up, both electric and gas prices also go up. So transitioning to clean, renewable energy resources, like offshore wind and solar storage, can help insulate our customers from such volatility and impacts.”
Additionally, Tepper spoke about her department’s recently issued household heating cost report, which is available on the Department of Energy and Environmental Affairs website. The report states that Massachusetts is expected to have lower energy prices this winter. However, weather forecasters are predicting a colder winter, which will drive household heating consumption and costs higher than last winter, except for electric heating.
“We know that the transition from fossil fuels to more efficient homes as well as efficient sources of decarbonized heating will reduce the uncertainty of heating costs,” Tepper said.
She then went on to talk about the currently in-development wind energy project Vineyard Wind, which she said has the potential to power 400,000 homes. “The good news is that, despite the cold and choppy waters, they are making progress for the project,” Tepper said. “It’s projected to provide an average of 1.4 cents per kWh of direct savings to ratepayers. There have been a lot of ups and downs in the offshore wind industry, but we believe in the power of it. We also know we have had success in our solar programs in the state.”
During the question-and-answer portion of the hearing, State Rep. Farley-Bouvier (D – Pittsfield) asked the three representatives why energy rates in Berkshire County are different and higher than other parts of the state. “The rate set for individual utilities is based on a particular operating characteristic of the utility,” Van Nostrand told Farley-Bouvier. “We look at the rate base, the [utility’s investments] in operating expenses, and we set a rate of return that we think reflects the risk of that particular utility as compared to other similar utilities around the country with similar risks. There are differences in terms of economies of scale. Their structure is based on the characteristics of each individual user.”
“So, what’s happening in Western Massachusetts?” Farley-Bouvier asked. “Are you saying that because of the low density of households and businesses [in Berkshire County] they do not have an economy of scale, so it’s more expensive here? What’s happening here that is making it more expensive? Is the equipment older? Is the grid worse? You’re in a position to really look at what’s happening in all these different areas with all these different companies. So what is it, and how can we fix it?”
“Some of this is historic because WMECO [Western Massachusetts Electric Company] merged [in 1966 with other companies to become the company now known as Eversource],” Tepper said. “[This area] is part of the Eversource world, but they are setting the rates [for areas that they cover] separately. But over time, this will change.”
“Over what amount of time will this change?” Farley-Bouvier asked.
“My understanding is that, right now, and the way it has traditionally been done, is that even though [the area] is part of Eversource, they are still taking the company’s costs and how much it costs them to run their utility, and then charging the customers that are in those areas,” Tepper said. “Over time, the Eversource group [of customers] will be charged together. So, everybody who is an Eversource customer will be charged together in the same way. In general, the cost to provide electricity in their area is more [than in other areas]. When they are setting rates, what the utilities do is that they come in [to the state] and say, ‘This is how much we spent last year,’ and go through every line at every expense. We look at how much it costs to serve these customers, and that’s what goes into these rates.”
Neither Tepper nor the other members of the Healey-Driscoll administration give an exact response of when the billing for Eversource customers will change.
In response, Rep. Farley-Bouvier said that she did not like population-density metrics being used to justify energy prices. “Your colleagues who are working on economic development, on housing and all of that, they’re being faced with this challenge of energy costs and density,” Rep. Farley-Bouvier said. “What I say literally to every single [regulator from the state government] who comes to the Berkshires is: ‘Stop using the metric of density, or ridership, or caseload across the state, because it doesn’t work.’ It is not a metric that is fair, nor is it productive. You can’t say, ‘Oh, we’re going to increase bus transportation, regional transportation based on ridership in the Berkshires’ because you can’t compare it to Lexington. The more you do it, the worse it gets. I’m so appreciative of the committee for bringing you all here so we can have this very important conversation. And while it is my hope that this [conversation] will be solution driven, we should understand that if we want to lift up the whole state, you can’t treat the whole state the same.”
