NSTAR Negotiates $116 Million Refund for Customers

Business Wire, Feb 6, 2007

BOSTON -- Thanks to the efforts of NSTAR (NYSE:NST), the Massachusetts Attorney General's office and other consumer advocates, NSTAR Electric customers will soon receive a refund on their bills. The group successfully negotiated with the owners of the Mystic Power Plant in Everett to refund reliability payments to customers. As a result, NSTAR customers will receive a refund of $116 million in 2007 as a reduction in transmission rates.

"In the deregulated energy marketplace, generators devote substantial resources to convince regulators they need these payments in order to keep running," said Thomas J. May, NSTAR Chairman, President and CEO. "This settlement sends a strong message that we will not stand idly by while our customers are being overcharged millions of dollars."

The agreement is the latest in a series of cases where NSTAR has teamed up with other consumer advocates to reduce wholesale market electricity prices. It terminates the "Reliability Must Run" or RMR contract that the owners of the Mystic plant had in place through 2010. The average residential customer's share of the refund will be about $32, while commercial customers who use more energy will see much larger reimbursements. For example, Massachusetts General Hospital stands to receive $423,000 over the next 10 months.

"As one of NSTAR's largest customers, this refund will go a long way towards reducing our energy costs in the coming year," said Dr. Jean Elrick, Senior Vice President of Massachusetts General Hospital. "We're extremely pleased to see them stepping up to advocate for their customers both small and large in the complicated energy markets."

The refund will go into the transmission rate on customer bills. This represents the cost of moving electricity over high-voltage power lines from the generating plant to NSTAR's service territory. Pending DTE approval, the lower rates would go into effect on March 1st.

NSTAR transmits and delivers electricity and natural gas to 1.4 million customers in Eastern and Central Massachusetts, including over one million electric customers in 81 communities and nearly 300,000 gas customers in 51 communities.