What is a Distribution Rate Case?
Distribution rates fund the day-to-day operations of a utility that support safe and reliable service: the poles, the pipes, the people and the programs that distribute energy to our customers. Last summer, we filed rate cases for our electric and gas operations, an action that initiated a thorough, months-long review by the DPU.
Our last electric and gas distribution rate filings were filed in 2019 and based on 2018 operating costs and investments.
Our External Affairs Manager, Alec O’Meara, explains more in this video.
What to know about this rate case
Summer 2023:
On June 30, 2023, we notified the DPU of our intent to file. Then, our team conducted a study on how best to structure the new rates to ensure equity among all customer classes, including residential customers, commercial businesses of all sizes, and those who qualify for assistance programs.
Fall 2023:
Our study and initial rate case filings were completed and provided to the DPU along with estimated bill impacts based on the proposed new rates.
Electric filing, 23-80, and gas filing, 23-81, can be found by searching these numbers on the Energy and Environmental Affairs website.
The DPU issued a notice for our rate cases and scheduled hearings to allow the public to provide feedback on the proposal and conduct a comprehensive review of the rate case to look at whether the expenditures included are prudent and in the public interest.
Interpretation services (Spanish, Portuguese) were available at the public hearings.
- November 9, 2023 - in-person hearing at the Fitchburg High School Auditorium
- November 29, 2023 - virtual hearing
- November 29, 2023 - virtual hearing
2024:
The DPU's ruling has been issued. This ruling establishes the rates for each customer class and customers will see the new distribution rates on their next bill.
Rate Case Outcome
On June 28, the Massachusetts Department of Public Utilities (DPU) issued a joint order on Unitil’s electric and gas distribution rate cases. This order is the culmination of a 10-month review of Unitil’s rate structure, operational costs, storm response and customer engagement practices and aims to set rates at levels that reflect the cost to provide safe, reliable service to all homes and businesses in the region in an equitable fashion.
As a result of this order, a Unitil residential electric customer using 600 kWh will see an increase of 5.8% percent or $15.01 to their monthly bill. Read the full electric schedule here. A Unitil gas customer using an average of 70 therms will see an increase of $34.41 per month. Read the full gas schedule here. Rate impacts will vary depending on usage and customer class.
Additionally, several Unitil proposals which seek to assist with the Commonwealth’s climate goals and lower the energy burden on income qualifying customers were approved by the DPU. Unitil will develop a rate specifically for customers using an electric heat pump to heat their homes, which may lower the cost impact of these high-electric-usage appliances. Additionally, customers on Unitil’s low income residential rate will see an immediate decrease in their bills as a result of the order. An income-qualifying residential customer on Unitil’s reduced rate using 600 kWh will see a decrease of approximately $5.25 in their monthly bill.
Lastly, a performance based ratemaking process will be used to adjust rates for the next five years. Rather than conduct a full rate case every two to three years, rates will be adjusted each year based on a calculation approved by the DPU as part of a process designed to ensure efficient and cost-effective service to customers. As part of the plan, Unitil will track its performance relative to a suite of metrics designed to measure the full range of benefits that will accrue, with the goal of assuring customers and stakeholders that standards of service are maintained or improved and that clean energy goals are advanced during the term of the agreement. Unitil has committed not to file a full rate case for five years as part of this plan.
The DPU order on our rate cases provides a comprehensive look at Unitil’s operational costs; we encourage anyone interested in learning more about the process to review the order in its entirety. The Department has included a summary of its decision in the order. Read the full DPU order here.
Customer Benefits:
Performance Based Ratemaking (PBR) enables greater rate stability through multi-year planning and annual adjustments to rates. PBR programs are used by other utilities in the Commonwealth to better manage operating and maintenance expenses efficiently and create cost containment that directly benefits customers. In short, PBR programs reduce the frequency and size of future rate cases and create more stable, lower rates for customers going forward. Our PBR proposal is designed to eliminate the need for another rate case through 2028.
Heat pumps, high-efficiency systems that use electricity to draw heat energy out of an environment, will be an important tool as the Commonwealth seeks carbon-free heating solutions for homes and businesses. There are a number of rebates available to aid in the cost of purchasing and installing a heat pump system for homes, and we are committed to further enabling adoption for customers interested in this emerging technology.
New rate classes will complement these policy initiatives and give customers using heat pumps some rate relief during the coldest months of the year. These rates will become available in 2025. Learn more about these rates.
As part of our filing, Unitil is increasing the electric low-income discount rate for our electric customers from 34.5 percent to 40.0 percent. We work closely with our most vulnerable customers to help them take advantage of the wide array of assistance programs available in the Commonwealth, and by increasing the per kilowatt-hour discount for qualifying customers, we can provide meaningful, additional aid monthly in helping to meet their energy needs.
Other Rate Case FAQ's
At Unitil
We aim to transform the evolving energy needs of our customers and help create a sustainable energy future that supports the Commonwealth’s climate initiatives. These important goals, which we all share, require continuous investment in our electric and gas systems and periodic adjustments to Unitil’s distribution rates are necessary.
