The hearings come as another power provider, Unitil, said Thursday it would seek a base rate increase of its own, which would increase monthly bills for customers by about 9.2%, the utility said.
AARP has come out against the Eversource request, submitting testimony in January regarding Eversource’s proposal to increase rates for its customers and change the way that rate increases occur in the future.
The 17% rate increase on residential customers would amount to approximately $258 each year.
Eversource said the higher rates are necessary to cover past investments, including expenses associated with power restoration efforts, vegetation management and grid upgrades to improve system reliability.
“It has been five years since our last base distribution rate review, and our customers have seen greater reliability as a result of those system investments,” Eversource Senior Vice President for Customer Operations and Digital Strategy Jared Lawrence said in a statement at the time the utility made its request. “At the same time, the costs to build and maintain the electric distribution system and serve customers have increased and the distribution rate has not kept pace with those increasing costs.”
Eversource’s proposal would increase the fixed monthly cost that residential customers pay –- which does not change based on usage –- by 43%, rising from $13.81 to $19.81 each month.
Increases to the fixed monthly customer charge reduces the amount of control a customer has over their electric bill — meaning no attempts at conserving electricity will reduce the fixed customer charge.
“By shifting more of the costs out of the variable charge and into the fixed customer charge, the customer has less of an incentive, and less of an ability, to control their energy use through energy efficiency and conservation,” Brad Cebulko — co-founder of the clean energy consulting Current Energy Group— told the PUC in written testimony given on behalf of AARP. “No matter how little energy a customer uses, it can never reduce the fixed customer charge.”
Cebulko said a customer’s bill is principally comprised of two components: a fixed, monthly charge and a variable charge. Each customer in a customer class pays the same fixed customer charge regardless of how much the individual customer uses the system. The variable charge, however, is applied to a customer’s usage, so the more the customer uses, the more that customer contributes to the system costs. When costs are shifted from the variable charge to the system charge, more of the costs of the system are collected through the fixed customer charge.
“The residential system charge comprises a relatively larger portion of the total customer bill for lower usage customers than it does for higher usage customers,” Cebulko said. “Shifting costs from the variable charge into the residential system charge shifts costs from high-usage customers to lower-usage customers. Usage is often correlated with income. All else equal, lower income residents are more likely to be lower usage customers as well. “When this is true, high fixed charges shift costs onto lower incomes residential customers.” Residents from across New Hampshire have submitted written testimony protesting the increase.
“With the cost of living already so high, every dollar counts,” Thomas Manning of Derry wrote. “The 17% increase proposed by Eversource for residential customers is unreasonable. By increasing the customer charge this much, Eversource is making me pay more before I ever turn on the lights.”
Michael Ridge of Amherst wrote that while Eversource may have seen some increases in cost of materials, a “quick perusal” of their press release of a 2024 press release shows “respectable operating profits” for electric transmission and distribution despite any cost increases.
“A reasonable person might conclude that Eversource is trying to squeeze even higher margins from their profitable operations to offset their mismanagement in other areas,” Ridge wrote. “Consumers cannot always pay the price for mistakes.”
Varel Freeman of Hopkinton wrote she doesn’t believe the increase is justified. “There has been absolutely no investment by Eversource in our neighborhood, hence I cannot understand the argument that they are suffering from inflation,” Freeman wrote. “Inflation would seem to me to impact new connections and new service areas, and therefore those beneficiaries should be compensating for any increased costs.”
Unitil said Thursday it has filed a base rate case with the PUC, asking for an increase in its distribution rate, the cost of delivering electricity to homes and businesses. The company’s last base rate case was filed in 2021.
“Distribution rate cases ensure that the distribution portion of the bill accurately reflects all changes to the cost of providing service to customers since the last filing,” said Alec O’Meara, director of External Affairs at Unitil.
If the rates are approved as filed, a residential electric customer on default service using an average of 600 kWh a month would see an increase of $11.23 per month, or 9.2% to monthly bills, the utility said. Unitil said the PUC review process could last up to a year or more.