Utility, Attorney General Agree To Cap Increase In Default Service Rates

Deferral Would Be Recovered From All Distribution Customers

October 8, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Fitchburg Gas & Electric (Unitil) and the Massachusetts Attorney General's Office (AGO) has reached a compromise to cap an upcoming increase in default service (basic service) electric rates, for the period starting December 1, 2021, and asked the Massachusetts DPU to approve the capped rates

As first reported by EnergyChoiceMatters.com, the new basic service rates for Fitchburg Gas & Electric mass market customers are proposed to be about 20 cents per kWh, as a result of Unitil's most recent procurement.

The increase in basic service rates was attributed, in part, to Unitil, in the most recent RFP, procuring 100% (rather than 50%) of its residential and small commercial load for the upcoming 6-month period to avoid risk premiums associated with the uncertain launch date of the City of Fitchburg’s proposed municipal aggregation plan.

The AGO asked that the DPU defer a portion of Unitil’s proposed increase to residential customers

Specifically, to mitigate the size of the rate increase and the associated financial burden on Unitil’s basic service customers, the AGO initially recommended that the DPU order the utility to implement a one-time deferral of 50% of the increase associated with the proposed basic service rate charge over last winter’s charge, or 4.24 cents per kWh.

Unitil said in an October 8 filing that it and the AGO have agreed to a compromise approach whereby Unitil will implement a fixed basic service rate of $0.15650/kWh for residential and small general service customer groups, along with associated variable monthly rates.

"The parties also agree that a similar adjusted rate should be applied to medium general service customer group, yielding a fixed basic service rate of $0.14433, and associated variable monthly rates," Unitil said

The specific optional monthly variable rates under the compromise can be found here

Unitil said that these compromise rates approximate the rates that would have occurred had the normal default service procurement blending been in effect

Unitil and the AGO agreed that the deferred balance should be collected through the Basic Service Adjustment charge (Schedule BSA, M.D.P.U. 376) beginning June 1, 2022 for a seven-month period ending December 31, 2022. Unitil estimates the deferred balance to be approximately $3.2 million.

In a notice inviting comment on the compromise proposal, the DPU noted, "Under the October 8, 2021 proposal, unrecovered costs would be collected through the Company’s basic service adjustment charge from all distribution customers over the period of June 1, 2022 through December 31, 2022."

Docket 21-BSF-A4

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