Mass. Utility Rates Reduced as DPU Launches Further Investigation
BOSTON — To ensure Massachusetts ratepayers receive the benefit of recent federal tax cuts, the Department of Public Utilities (DPU) ordered NSTAR Electric Company (NSTAR) and Western Massachusetts Electric Company (WMECo), together doing business as Eversource Energy, to reduce rates due to the federal tax law in their base rates that will take effect on February 1, 2018.
Additionally, in an effort to capture savings for ratepayers in the Commonwealth, DPU opened an investigation to analyze how the recently enacted federal tax reform may affect gas, electric, and water utility rates for Massachusetts utility customers.
As a result of the reduction in the tax expense and the rate consolidation of the companies, the DPU’s Order reduced the recently approved rates for Eversource Energy by approximately $56 million. Eversource customers will now see an approximately $20 million, or 1.8 percent, decrease in rates, instead of the approximately $36 million increase that was initially approved by the DPU.
“Through the reduction of rates for utility customers, coupled with an investigation into possible additional savings from federal tax reform, the Department of Public Utilities remains committed to ensuring that utility consumers are provided with the most reliable service at the lowest possible cost,” said DPU Chairman Angela M. O’Connor.
Under ratemaking principles, utilities in Massachusetts subject to DPU regulation are allowed to reflect a representative level of tax expense in their rates. This DPU investigation, docketed as D.P.U. 18-15, will consider how regulated utilities should account for the corporate tax savings created by the federal tax law. Utilities are required to review the Federal Tax Cuts and Jobs Act and file proposals with the DPU by May 1, 2018 for approval to reduce rates to reflect the effects of the tax law.
--Department of Public Utilities