United States: Eversource Proposes Rate Increases And $400 Million In Grid Modernization Investments

Last Updated: February 6 2017
Article by Kevin C. Conroy, Alicia Barton, Tad Heuer and Zachary Gerson

On January 17, 2017, Eversource Energy filed a petition with the Massachusetts Department of Public Utilities (DPU) that would increase base distribution rates for its 1.4 million electricity customers across the Commonwealth. The company's proposal states that it would increase a typical residential customer's total monthly bill by approximately seven percent in eastern Massachusetts and approximately ten percent in the western part of the state. According to the petition, the rate increase is necessary to alleviate revenue deficiencies of Eversource's subsidiaries, NSTAR Electric Company and Western Massachusetts Electric Company (WMECO), of $60.2 million and $35.7 million, respectively. This is likely to be the company's first fully litigated rate case in eastern Massachusetts in 25 years. If approved, the proposal would also complete the legal consolidation of the NSTAR and WMECO entities.

The Eversource petition contains numerous and wide-ranging proposals for proposed new investments by the company, rate re-design, rate class consolidation, a new cost of service study, and a first-of-its kind proposal for performance-based rates. The voluminous filing is comprised of ten volumes with exhibits, and the company is requesting to implement the proposed rate changes on January 1, 2018. The filing has already elicited opposition from the Attorney General's Office, which will oppose the requested rate hike and perhaps other aspects of the petition.

A summary of some of the key components of the filing that may be of interest to the energy and cleantech industry, as well as to their customers and other Massachusetts businesses and electricity consumers, is provided below.

Overview of the Grid-Wise Performance Plan

Eversource's Grid-Wise Performance Plan (GWPP) consists of two major components: (1) a Performance-Based Ratemaking Mechanism, and (2) a Grid Modernization Base Commitment.

The Performance-Based Ratemaking Mechanism (PBRM) would adjust rates annually in accordance with a revenue cap formula, which Eversource is proposing as an alternative to a capital-cost recovery mechanism. The PBRM is designed to work with the company's revenue decoupling mechanism, and Eversource asserts that structuring the ratemaking mechanism in this way will promote long-term cost control and enable investment in emerging technologies.

Through the proposed Grid Modernization Base Commitment (GMBC) component of the GWPP, Eversource would commit to $400 million in grid-modernization investments over five years. The GMBC would fund initiatives in two general categories: (1) Distribution System Network Operations, and (2) Customer Engagement and Enablement. Specific initiatives would include, for example, implementation of a modern distribution management system, development of remote sensing and switching capabilities, and development of hosting capacity maps to provide customers with information about interconnection in specific locations. According to the petition, these initiatives would promote the DPU's grid modernization objectives of: (1) reducing the effects of outages, (2) optimizing demand, (3) integrating distributed resources, and (4) improving workforce and asset management.

Energy Storage Demonstration Projects

As part of its grid modernization efforts, Eversource has proposed an energy storage pilot program that would invest $100 million in company-owned storage projects over five years. The company states that it is currently evaluating potential projects located in Martha's Vineyard, Wellfleet, New Bedford, and Pittsfield, but that the specific projects may change. According to the petition, the four currently proposed projects would each provide between 6 and 15 MW of capacity and are estimated to cost between $10 and $45 million each.

Electric Vehicle Charging Infrastructure

The petition includes a proposal for a $45 million Electric Vehicle Infrastructure and Education Program that the company states would provide the infrastructure necessary to support potentially more than 4,000 new electric vehicle charging stations, including up to 60-plus DC Fast Chargers. The project would include both utility-side infrastructure installations and behind-the-meter installations for which Eversource would contract with third parties. The petition asserts that such action is appropriate because the private sector is not likely to make the investments necessary to achieve the Massachusetts Executive Office of Energy and Environmental Affairs' goal of having 300,000 zero emissions vehicles registered in the Commonwealth by 2025.

Noteworthy Rate Design Features

Consolidation of Customer Classes

Eversource's rate proposal would consolidate its existing 55 rate classes into 10 new rate classes and one new optional time-of-use rate class. The new scheme would include four Residential rate classes: R-1 Residential for non-heating customers, R-2 Residential Assistance for non-heating customers, R-3 Residential Heating, and R-4 Residential Assistance Heating. It would also include four General Service rate classes (Small, Medium, Large and Extra Large) based on customers' billing demand, and two Street and Security Lighting rate classes. This realignment could have potentially significant impacts for customers who will be shifted into a new rate class— and Eversource has proposed a mitigation plan to reduce the bill impacts to certain customers who may otherwise see a significant bill impact as a result of tariff consolidation and alignment. Potentially impacted customers will need to pay careful attention to the details of the new proposed rate classes and structures.

Optional Time-of-Use Rates

Eversource proposed a new optional time-of-use (TOU) rate for small general service customers who qualify for the proposed Small General Service rate class. Eversource states the TOU rate is designed to be revenue neutral to the standard Small General Service rate. Eversource will not assign any customers to this optional rate class, but customers who evaluate their load profiles may wish to elect the rate.

Monthly Minimum Reliability Contribution

The petition includes a demand-based Monthly Minimum Reliability Contribution (MMRC) for new customers who elect to receive net metering credits, as was authorized last year by the Massachusetts Legislature. In "An Act Relative to Solar Energy" (Ch. 75 of the Acts of 2016), the Legislature enabled the utilities to institute an MMRC under certain conditions in an effort to recover a portion of the fixed costs of maintaining the electric distribution system in exchange for raising the state's net metering caps.

Eversource states that the distribution rates for each class under the MMRC— which will apply only after the aggregate nameplate capacity of installed solar generating facilities in the Commonwealth is equal or greater than 1,600 MW-- are based on the allocated cost of providing service (as supported by studies included in the petition), and Eversource's target rate design revenue for that class. The rates would include a customer charge, a demand charge, and where applicable, a volumetric charge, and would affect new residential netmetering customers with an in-service date on or after January 1, 2018 and new general service net-metering customers with an inservice date on or after January 1, 2019. Notably, this would be the first application of a demand charge to residential rate classes, and would require installation of a new meter for those consumers. Eversource has also proposed an MMRC for low-income consumers.

Next Steps

Eversource's petition has been docketed as D.P.U. 17-05, and the company's ten-volume initial filing is available on the DPU's website. While the DPU has not yet issued an intervention deadline, we anticipate that it will soon set one for as early as 30 days from the date of the filing of the petition. Under Massachusetts law the DPU has ten months to review Eversource's request.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
25 Oct 2017, Webinar, Boston, United States

Foley Hoag will present a 60-minute webinar on Wednesday, October 25 at 12:30 pm EDT, offering guidance for in-house counsel regarding the basics of trademark and design protection in the European Union. Attendees will learn about the opportunities and pitfalls to be on the lookout for when looking to secure, protect, and enforce an IP portfolio overseas.

1 Nov 2017, Webinar, Boston, United States

Please join Foley Hoag on Wednesday, November 1, 2017 for a webinar that covers the details of drafting an appropriate arbitration clause for your company’s commercial contracts.

9 Nov 2017, Conference, Waltham, United States

Please join us on Thursday, November 9 at the Westin Waltham Hotel for our quarterly New England M&A Forum, which brings the latest in market trends and recent legal developments to the New England M&A professionals' community.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.