November 4, 2016—Last November, National Grid filed a request with the Massachusetts Department of Public Utilities (DPU) to increase its distribution rates to help cover the costs of net metering for distributed generation (DG) customers. The utility petitioned to increase customer rate charges, including the R-2 low-income rate which would be raised in two phases. Phase I would raise prices, while Phase II would introduce a tiered rate system that would charge between $6 and $20, based on usage. The customer’s usage would be determined by sampling one month’s data for their household. The customer would then be locked into a monthly charge based on that month’s usage for the rest of the year with no opportunity to lower the rate through energy efficiency or other conservation measures until the year ended.
This tiered charge proposal was opposed by the Office of the Attorney General, the Department of Energy Resources, and Acadia. The Low-income Weatherization and Fuel Assistance Program Network (The Low Income Network) and the National Consumer Law Center (NCLC) also opposed these changes and argued on behalf of low-income customers for a fairer rate design. They argued that tiered charges would disproportionately burden low-income ratepayers, increasing some bills by as much as 60 percent. They also argued that low-income households generally do not use as much energy, and that the combination of higher fixed charges and lower usage rates would remove the incentive to conserve energy or use energy efficiency measures. The DPU rejected National Grid’s entire tiered charge proposal.
The Low Income Network and NCLC also found that National Grid’s arrearage management program (AMP) program participation was well below average for the state and suggested that the utility examine its AMP policies and practices. It was also suggested that the company should report on its findings to the DPU in six months. National Grid raised no objections and the DPU agreed.
Finally, because Massachusetts statute (G.L. c. 164, § 141) protects low-income customers “where the scale of on-site generation would have an impact on affordability for low-income customers,” and that “fully compensating adjustment shall be made to the low-income rate discount,” the Low Income Network and NCLC were able to successfully argue for a rate discount for low-income customers. The advocates presented evidence that showed that all customers would end up paying extra for incentives for on-site generation, but that low-income customers would not likely benefit from those incentives because of the cost-prohibitive nature of on-site generation. The DPU itself determined that the cost of the incentives would come to an additional $4.20 discount per month for low-income customers and said it “expects” all electric utilities in Massachusetts to propose a $4.20 per month discount for low-income customers in upcoming rate cases.
NCLC has reported that, in the aggregate, the value of the discount rates will increase approximately $15 million annually once this DPU decision is applied to all companies.
Sources: Massachusetts Department of Public Utilities