Attorney General Maura Healey will challenge a request by Eversource to raise electricity rates for its Massachusetts customers next year, saying the company already reaps plenty of profits and charges more than other utilities.
Eversource on Monday asked state regulators at the Department of Public Utilities for permission to increase rates by $96 million. That would add about 7 percent, or $8.45, to the average monthly residential bill in Eastern Massachusetts, and about 10 percent, or $11.64, in Western Massachusetts.
The figures are based on the profit Eversource would like to return to its shareholders — 10.5 percent. But Healey, whose office represents ratepayers before the DPU, argued the figure is too high, citing recent decisions by Connecticut and Maine regulators to cap profits for electric utilities at 9.1 and 9 percent, respectively.
Last year, Healey questioned a decision by the DPU to allow another Massachusetts utility, National Grid, to reap a 9.9 percent shareholder profit margin, saying it was the highest allowed since 2009.
“Eversource is required to justify why the state should permit it to raise electric rates on residents and business customers,” Healey said in a statement. “Our initial evaluation shows that Eversource should be returning profits to customers as savings, not raising rates.”
In its request, Eversource said the rate hike is needed to “alleviate revenue deficiencies” of $60 million in its Eastern Massachusetts service area, and $35.7 million in Western Massachusetts. The two zones represent the territory previously served by NStar and the Western Massachusetts Electric Company, which merged in 2012.
Eversource said the requested increase follows years of rate freezes and is necessary “to raise sufficient capital to make improvements to infrastructure and provide reliable service to customers.”
In a statement, spokeswoman Caroline Pretyman said that “our investment in a modernized electric grid will mean an increasingly smarter, more technologically advanced system for customers, allowing the company to expand its commitment to reliability and clean energy.”
Kevin Conroy, an attorney who heads the energy practice at the law firm Foley Hoag, said the rate hike is going to be a tough sell.
“Eversource is seeking a substantial increase on top of historically high rates while simultaneously asking ratepayers to fund a series of capital expenses,” he said. “I expect they will face a tough battle ahead to justify this controversial increase which should absolutely be met with intense scrutiny by the DPU, the attorney general, and the business community.”
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