It’s Time for the Department of Public Utilities to Start Taking C&I Customers Seriously

By Cynthia A. Arcate 7 November, 2017

Over the years, the four major groups representing commercial and industrial (C&I) customers in proceedings before the Massachusetts Department of Public Utilities (DPU)—Associated Industries of Massachusetts, The Energy Consortium, The Western Massachusetts Industrial Group and PowerOptions—have actively participated in numerous dockets, presenting a unique C&I customer-oriented perspective, only to have their positions dismissed with little explanation.

These organizations collectively represent a majority of all C&I customers in the Commonwealth. They have energy expertise themselves, and they retain outside counsel and consultants with extensive expertise. Yet, when their views are opposed by the utilities, the Attorney General (AG) or the Department of Energy Resources (DOER), those views are rejected out of hand as if these entities somehow know better how utility proposals impact customers and what is happening in the retail competitive market. The situation is not new to the current DPU; it has persisted for years.

The most recent example is the DPU’s order concerning proposed demand reduction demonstration projects from Eversource (Docket 16-178). Filed over a year ago but only approved last week, the proposals were half-baked and had very little factual support or analysis behind what the company was going to do with the $20 million requested to be spent over an 18-month period and recovered only from C&I customers. The company witness was ill-prepared. He couldn’t answer most of the questions put to him, and the plan for spending C&I customer money was vague at best. Equally important, the legal standing for filing was questionable and the utility was unclear on exactly what basis they could even file the request under the statutes, rules and regulations. They ended up punting on a vague explanation, and the DPU embraced it. The proposal was approved, and a new legal standard was created by the DPU that essentially gives the utilities a blank check to do what they want as long as they call it a “demonstration project.”

The DPU found that a 1-3.9% increase in costs to C&I customers (total bill, not just the delivery portion of the bill) was reasonable, based solely on the view that the AG and DOER thought it was reasonable. There was no evidentiary support for that conclusion. Yet the entities representing the thousands of C&I customers in the state said that it was not reasonable and gave solid reasons why. The customer groups made a clear case that much of what Eversource wanted to “demonstrate” is already happening in the competitive market and that there is plenty of data and experience already in the market to inform their demand response programs for the next three-year energy efficiency filing. Just because they don’t know about it (or the AG and DOER, for that matter) doesn’t mean it’s not happening.

It’s time for the business community to be outraged—they should not take it anymore. Clearly, they are not being heard. Massachusetts already has among the highest electricity costs in the country. These costs contribute to the high cost of healthcare, manufacturing and education in our state, as well as drive out industry—all of which has a direct impact on jobs. And it’s not just about costs. What the DPU is letting Eversource “demonstrate” is an infringement on the competitive market for these services. We argue that the DPU should first let the market deliver these products and services rather than have customers subsidize the utilities’ exploration of business opportunities for themselves. When will the DPU start to connect the dots and listen?

The opinions expressed in this article are solely Cynthia Arcate’s, in her representation of PowerOptions members’ interests. For clarification, AIM was not a party to the Eversource case.

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