BOSTON - Eversource – the largest energy provider in New England – is asking Massachusetts customers to pay more money for electricity at a time when the company just paid millions to its top executives, a 25 Investigates review found.
Norfolk resident Angela Wilcox said she was troubled to learn her Eversource bill would spike over the next several years if the state approves the electric company’s request to raise rates by hundreds of millions.
“It just makes me so angry,” Wilcox told Investigative Reporter Eric Rasmussen.
According to the company’s own math, average customers around Boston would see their bills go up more than $8 a month – or $100 a year.
And that’s just next year.
Eversource says bills could spike an extra $20 a year in 2019, 2020, 2021 and 2022.
It’s not just customers who are on the hook for any rate increases. State records show taxpayers shelled out $24 million to Eversource last fiscal year to keep the lights on in government buildings.
Eversource is writing big checks to its top executives
Last year, the electric giant paid $34.5 million to just seven people – including two who are now retired.
25 Investigates went to Hartford, Connecticut earlier this month for the company’s annual shareholders meeting and spoke with Eversource’s outgoing chairman and former CEO Thomas May.
>> Watch former Eversource CEO Thomas May's response above
When asked how he justifies his compensation while asking customers to pay more, May said, “All I can tell you is the compensation is set by the marketplace. Not by us, but by what people are willing to pay in the marketplace, much like baseball players or football players.”
And customers have paid him like an all-star.
In 2014, he made $8.9 million. In 2015, May hauled in $9.6 million and last year, his total compensation topped out at more than $11 million.
25 Investigates also looked at the top executives for other area electric utility companies.
The CEO of National Grid made more than $6 million at last count, while the head of the New Hampshire-headquartered Unitil took in about $3 million. The big utility of New York – Con Edison – paid its CEO $9.6 million last year.
“We pay industry standard wages and salaries and benefits,” May told 25 Investigates.
“Do you think customers are satisfied with that?,” Investigative Reporter Eric Rasmussen asked him.
“Customers, I think, for many parts, if they're informed, yes, they understand. That's what you have to do. You need good talent to have good results," May said.
Why your bill could eventually go even higher
In addition to the proposed rate hike, Eversource also wants “pre-approval” to spend another $400 million for a “Grid Modernization” plan – costs which would also eventually be passed on to customers.
A small portion of that money – $45 million – would go to build more electric vehicle charging stations like the seven car charging bays the company recently installed in a Boston Seaport pay parking lot. But on the Wednesday morning 25 Investigates went to visit the site, half of the charging spaces were empty.
Eversource provided a general list of plans for the other $400 million in proposed upgrades – but with limited details.
“I don't think it's justified. I think it's a bad deal for customers,” said Massachusetts Attorney General Maura Healy.
Healey testified against the proposed rate hike to the state Department of Public Utilities, which has the final say. She told 25 Investigates the company is going after a 10.5 percent return for shareholders – higher profits than other utilities in New England.
In Eversource’s most recent report to its investors in March, 25 Investigates found that the company already touted double-digit returns for “the seventh time in eight years” and boasted “our stock performance continues to outperform the industry.”
Healey told 25 Investigates: “Companies are entitled to make money… my concern is that it’s at the expense of customers.”
Don't miss this. When investors are bringing in higher and higher returns, a rate hike simply can not be justified. https://t.co/kCWRBTUcaV— Maura Healey (@MassAGO) May 17, 2017
Town leaders support electric bill increase
Yet many towns are getting behind the proposed Eversource rate hike.
25 Investigates found at least 17 letters filed in support of Eversource from towns including Milton, Easthampton, Sandwich, Mashpee, Canton, Dover, Dartmouth, Walpole and Westwood.
Many of the letters were nearly identical – word-for-word – from a form letter Eversource sent to town officials.
Eversource said its “community relations representatives” met with city and town leaders across the state as part of its “robust communications plan.”
Westwood Town Administrator Mike Jaillet told 25 Investigates he supports Eversource’s rate hike and confirmed the company gave him a former letter to send to the state.
When asked what he says to customers who might feel like the town is selling them out, Jaillet said, “I don't think that the town is selling them out because we're not the ones making the decision. There was simply a letter of support for what they're doing.”
Jaillet insisted that the town gets nothing in return for that support.
Eversource's defense for its proposal
25 Investigates asked to speak with Eversource’s current CEO, James Judge, but the company instead offered an interview with Jim Hunt, senior vice president of regulatory affairs and chief communications officer.
When asked about the large payouts to Eversource executives, Hunt said, “Well, to put it in perspective, Eversource is a very large company. We represent 3.6 million customers across New England.”
Hunt also defended the Eversource’s proposed rate hike and told 25 Investigates the company spends more than it collects.
Eversource showed 25 Investigates a new $131 million substation in Boston’s Seaport district. The company says it’s asking customers to pick up part of that tab now and more in years to come.
“We're investing $300 million dollars a year in capital to upgrade our system,” said Hunt.
Questions raised by utility watchdog
But utility watchdog Patrick Mehr wants state regulators to press Eversource about why it charges so much money to deliver electricity to homes and businesses.
Mehr says Eversource charges 56 percent more, on average, than the 41 utilities run by cities and towns that supply electricity to their residents.
“To be a monopoly and to be able to come for more money when it's not clear at all that you've used the previous money intelligently is just not a solution,” Mehr told 25 Investigates. “Five hundred kilowatt hours is five hundred kilowatt hours. If somebody can sell them, year in, year out, at about $72 a month and somebody else charges $112, that somebody else – Eversource – has a huge problem.”
Angela Wilcox, the customer from Norfolk, said she’s also not convinced customers are getting their money’s worth, especially when they can’t take their business elsewhere. Wilcox wrote a letter to the state opposing the rate increase.
“There's really nowhere to turn. We just have to take it because that's what they're telling us they need to do,” said Wilcox. “I think we just have to be educated consumers to understand what's going on behind closed doors.”
How you can share your opinion with the state
The proposed rate hike is not a done deal. The state is still taking public comment – but only until the end of May.
Commenters should include the docket number (DPU 17-05) and their name – or company name – as well as contact information.
The three-member state Public Utilities Commission is expected to vote on Eversource’s new rate proposal this fall.
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