National Grid’s 1.3 million electric customers in Massachusetts should brace for a rate hike that could increase their monthly bills by up to 3 percent, although it wouldn’t take effect until next fall if approved by state regulators.
The utility this week filed a five-year rate request with the state Department of Public Utilities to cover rising distribution costs — essentially the expenses associated with maintaining, operating, and upgrading the lines and related equipment that bring power to homes and businesses. Some of the money will go toward pole-mounted technology and software to minimize outages.
If rates go into effect as suggested, a typical residential customer would see bills rise by roughly $25 a month by the end of the five years, starting with an extra $5 a month in the first year, and representing an increase of 2.2 percent.
That translates into an average of $110 million in additional revenues for National Grid each year, money the utility says is crucial for building a more reliable and resilient system.
Meanwhile, the utility is also seeking funds to modernize its portion of the electric grid, so it can better handle the proliferation of solar panels and on-site batteries and the expected increased demand as more people turn to electricity to power their vehicles or heat their homes. This “Future Grid” proposal, if approved, would bring an additional $44 million a year to National Grid over the upcoming five years and add just under 1 percent to a typical household’s electric bill.
Taken together, these two requests would increase electric bills by an average of about 3 percent over the five years.
The National Grid filing is separate from its recent rate request to cover the pass-through cost of procuring electricity on behalf of customers who don’t use a competitive supplier or a municipal aggregation plan, instead of relying on the utility to buy the power.
Those rates, for the supply portion of electric bills, are actually going down this winter when compared to last winter, reflecting a stabilization in the energy markets that took place in the past year. Utilities such as National Grid change these rates every six months, to keep up with fluctuations in the wholesale market. (Coincidentally, Eversource just filed for new supply rates, also to significantly cut that portion of customers’ bills compared to what they saw last winter.)
However, the distribution portion of bills generally only changes every five years. The last time National Grid filed such a request was in 2018.
There are some new twists this time. National Grid is proposing to increase subsidies provided to low-income ratepayers: Instead of a standard 32-percent discount for all income-eligible customers, National Grid wants to provide a range based on income levels, from 32 percent to 55 percent. (This increase in subsidies would cost an extra $32 million a year and be spread across all other customers.) Also, there would be a new opt-in program that could give residential ratepayers a 10 percent discount if they ramp up their electricity consumption because of a heating change or electric car purchase.
Charlie Harak, a senior attorney with the National Consumer Law Foundation, praised the new discounts for low-income ratepayers, saying his group sees a tiered discount as a better approach to a flat one because it provides deeper assistance to those most in need.
Eversource, the state’s other giant electric utility, last filed a distribution rate request in 2022. The total increase, as of January 2023, represented an extra $6 to $7 per month for residential customers to help upgrade and modernize the electric system while clearing vegetation and improving responses to storms. Eversource is also separately pursuing its own “smart grid” filing with the state, to pay for additional improvements to help the state reach its decarbonization goals.