Utilities change course on charging interest on winter relief
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Illustration: Aïda Amer/Axios
The Healey administration fended off an attempt by utility companies to charge interest on energy costs deferred under the governor's winter relief plan.
Why it matters: The relief plan could have cost households more in the long run if utilities charged interest on the deferred amount.
Catch up quick: Gov. Maura Healey announced an agreement with utility companies that would lead to a 25% drop in electric bills and 10% drop in gas bills for energy usage in February and March, using $180 million in state funds to help cover the costs.
- National Grid on Monday asked state regulators to approve its plans to charge customers up to 6.75%, the prime interest rate, on the deferred costs.
- Eversource filed a similar request this week to recoup losses related to temporary reductions on gas bills, but the company later decided to drop that request, said spokesperson William Hinkle.
The latest: All utility companies serving the state — National Grid, Eversource, Berkshire Gas and Unitil — ultimately agreed to drop their requests, Healey announced Wednesday afternoon.
- Asked about the proposed interest charges, Healey had told reporters earlier in the day that she had asked the companies to cancel their requests, adding that she was "surprised" by them.
Zoom in: National Grid's petition said it will face a combined $96 million in losses due to the winter relief plan, even with the $94 million it's receiving from the Healey administration to offset the cost.
- Under the proposal, National Grid's electric customers would have seen a $4 increase in monthly bills between April 1 and Dec. 31, the off-peak period.
- Gas customers would have seen a $9 monthly increase.
- Attorney General Andrea Joy Campbell asked state regulators in a response filed on Wednesday not to let National Grid or any other utility company charge the interest.
Meanwhile, Eversource offered "winter bill stabilization" reductions for usage starting in January, Hinkle said.
- "With the extreme cold temperatures expected to persist creating the potential for even higher usage, this is the appropriate step to take in support of customers," Hinkle said in a statement to Axios.
Editor's note: This story has been updated to reflect that utility companies reversed course on plans to charge interest on deferred energy costs.