NStar is set to return $44.8 million to Massachusetts ratepayers as part of a broad settlement with Attorney General Martha Coakley.
The total settlement combines three long-term overcharges levied by NStar and resolves 11 previously open cases before the Department of Public Utilities. The settlement was filed with the utility regulator on Dec. 31, and must be approved by March 2, 2015.
The settlement does not affect NStar’s residential electricity rates for the first six months of 2015, which are estimated to be 29 percent higher compared to the winter and spring of 2014. Refunds will be passed on to customers through reductions in their electric and gas bills starting in April 2015.
Coakley’s office rebuked the Department of Public Utilities in its statement on the settlement, saying the overcharges resulted from the regulator’s failure to ensure that utilities actually paid several costs they charged ratepayers for. Those charges make up a small fraction of the typical household’s electricity bill.
“Today’s settlement highlights the need to return to basic ratemaking principles, rather than relying on these annual rate adjustment mechanisms for utility cost recovery,” Coakley said in a statement.
The largest portion of the refund -- $23.6 million -- stemmed from a levy to pay employee pensions that NStar said it inadvertently charged double for from 2003 to 2012. An NStar employee discovered the error in November 2012, according to a copy of the settlement, and the company first brought it to the attention of Coakley’s office in December 2012.
The second largest portion of the settlement is related to six years of overcharges relating to capital expenditures, and calls for $17.2 million in customer refunds. The settlement agreement does not say how the overcharges came about. The final $4 million was a result of energy efficiency overcharges.
NStar spokesman Michael Durand said his company was “pleased” with its discussions with the attorney general’s office and happy to provide relief to consumers. He said the company had not yet calculated the impact the settlement would have on electricity bills for households and businesses.
Mary-Leah Assad, a spokeswoman for the Department of Public Utilities, could not be reached for comment.Jack Newsham can be reached at firstname.lastname@example.org. Follow him on Twitter @TheNewsHam.