Berkshire Gas files for rate increase; result would be about $40 extra on annual bill
PITTSFIELD — Berkshire Gas Co. customers could see an annual increase of about $40 in their gas bill beginning next April.
The company on Thursday filed a petition with the Department of Public Utilities for a rate increase — the first such request in 17 years. The utility is seeking to increase its annual net revenues by $3.1 million, or 4.3 percent.
In a written statement, Berkshire Gas stated that the request was filed to provide recovery of higher operating and maintenance costs, costs associated with federal and state regulatory mandates and costs to upgrade its distribution system since it last filed for a rate change in 2001. A rate adjustment was granted seven years ago, but before 2001, Berkshire Gas last filed for a rate increase with the state in 1992.
Thursday's filing marks the start of a review process that will take 10 months to complete, according to Berkshire Gas spokesman Christopher Farrell. Hearings have yet to be scheduled.
"We just filed today," he said.
The DPU is expected to decide on the firm's request by March 31, 2019, which means the new rates wouldn't go into effect until April 1, 2019.
Although the average residential customer's yearly bill would increase by $40, the proposal calls for the average monthly bill to rise by $8.43, or 4.8 percent from the current rates, during the winter months, and fall by $1.77, or 4 percent from the current rates, in the summer.
Gas rates are adjusted every six months. The typical residential customer uses 136 therms, or units of heat energy, of gas per month during the winter, and 29 therms per month during the summer, according to Berkshire Gas.
Residential customers who use 18 therms of gas per month during the winter would see a monthly increase of $4.02, or 10.2 percent higher than the current rates, during the winter; and an increase of $1.21, a 4.2 percent jump over the current rates, for using 12 therms of gas during the summer.
Increases in the annual bills for typical commercial and industrial customers would range from 1.45 percent to 2.78 percent, depending on each of the six rate classes.
Under the proposed rates, low-income customers would be eligible for a 25 percent discount, based on income levels that are used to qualify applicants for the federal Low Income Home Energy Assistance Program or any other criteria that might be determined by the DPU.
"We have worked hard over the past 17 years to effectively manage our business and our costs, while placing safety and reliability ahead of all other priorities," Berkshire Gas President and Chief Operating Officer Karen Zink said in a statement. "The fact that we have been able to hold the line on rates since our 2001 filing and since our last rate adjustment in 2011, speaks to the success of out fiscal responsibility and hard work on behalf of our customers."
"I think at some point you've got to file," Farrell said. "Your costs continue to go up and you have mandates to comply with and we continue to invest in our distribution system. There just comes a time when you can't stay out indefinitely."
State Rep. William "Smitty" Pignatelli, D-Lenox, the dean of the Berkshires' state legislative delegation, said he had not seen the request as of Thursday afternoon.
"I've always admired the local face of Berkshire Gas now that it's a big conglomerate now," Pignatelli said, referring to Berkshire Gas Co.'s parent firm, Avangrid Inc., a sustainable energy company with $32 billion in assets and operations in 27 states. "The fact that they haven't asked for an increase in 17 years is very reasonable."
"I still think we have to have a conversation about expanding their footprint and getting new customers," he said, adding that he is not in favor of gas pipelines.
Berkshire Gas also is proposing to adopt three established rate mechanisms: a revenue decoupling mechanism intended to promote energy efficiency; a pension cost adjustment mechanism; and a longer-term rate plan that will provide for rate adjustments based on inflation and other factors to avoid the need for frequent base rate cases.
The DPU granted Berkshire Gas a 4.5 percent rate increase in 2001, the same year the state agency approved a performance-based rate plan that allowed the utility to increase its rates by the rate of inflation, less 1 percent annually, eight times over a period of 10 years, after a 31-month rate freeze. The rate adjustment in 2011 was the last one allowed under this plan.
Since 2002, Berkshire Gas has increased its rates by only 8.5 percent during a period when the aggregate rate of inflation was 35.6 percent, according to the company.
According to Berkshire Gas, the company has made substantial investments in its gas distribution plant since 2001, including infrastructure upgrades and replacements to assure the reliability of its 750-mile distribution system in Western Massachusetts.
Since 2004, Berkshire Gas has spent more than $35 million to assist customers in making their homes and businesses more energy efficient, which has saved 5.4 million therms of natural gas.
Business Editor Tony Dobrowolski can be reached at email@example.com or 413-496-6224.
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