Our Opinion: Eversource hasn't yet made its argument

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The controversy surrounding Eversource Energy's rate hike request before the Department of Public Utilities can be characterized as a "failure to communicate." It's a failure to explain to business, public and residential electricity users why Eversource needs nearly $96 million more in 2018 to ensure a satisfactory return on investment for its shareholders. Equally important, it has failed so far to convince the DPU, which stands in for the people as overseer.

At a public hearing before the DPU last Tuesday (Eagle, August 2), individual ratepayers, business operators and local politicians made their displeasure known, raising among other points that Eversource is already doing quite well and is not — in their opinion — in need of such a drastic rate hike. They have plenty to be concerned about. Not only will the proposed hike raise rates by approximately 10 percent next year — a heavy hit by itself to residential users on fixed incomes — the increase in overhead for local businesses will create a catastrophic ripple effect in terms of job loss, lack of expansion, and a further battering to an already struggling local economy. The loss of two South County paper companies and hundreds of jobs due to a stiff increase in 2007 still stings, and last Tuesday representatives from two large local employers, Onyx Specialty Papers and Crane & Co., described in explicit terms how the proposed increases would depress future hiring.

Cities and school districts, faced with the same increases, would have to lay off more public employees and teachers, along with delivering a "double hit" to customers by having to increase property taxes to keep the lights on.

It is possible that Eversource can mount a legitimate case for the increase. After all, fuel, maintenance and construction costs rise for utilities just as they do for the rest of us. So far, though, the company not made a convincing argument, partly due to the fact that it has been less than transparent about the process it arrived at to justify the request. When confronted, it has presented complicated and mystifying formulas that obfuscate rather than clarify. It has also failed to credibly explain why an undue portion of the hike's per-capita burden lands of Western Massachusetts residents.

There is evidence that Eversource is listening to the public outcry. After a contentious hearing before the DPU last April, the company adjusted its proposal downward at the beginning of June. This may just be standard bargaining practice, and even though Eversource is a public utility, the primary fiduciary duty of its leadership must be to its stockholders. No one can blame it for trying to generate as high a profit as it can, which makes the DPU's vigorous and robust oversight in this instance so critical.

Eversource needs to step up with a stronger and more coherent pitch, but if anyone's feet should be held to fire, it's state government, which discharges its duty to safeguard the Massachusetts business climate and the economic well-being of its citizens through its various agencies — including the DPU. With so much at stake for the future of Berkshire County, its citizens and businesses cannot afford to be distracted by fat, easy targets like Eversource. They need to keep their eye on the ball, and keep up the pressure where it counts.


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