In deal with AG's office, Berkshire Gas trims rate-hike request
Under an agreement reached with the state Attorney General's Office, the utility will reduce its proposed rate increase to about $1.4 million, and might not seek another bump for three years.
The company's initial proposal, which sought an annual revenue increase of $3.1 million, would have cost customers an additional $40 a year, on average. The exact annual increase under the revised rate hike was unclear, but it would be "significantly less than $40," said Berkshire Gas spokesman Chris Farrell.
"As the ratepayer advocate for the state, it is our job to ensure we get the best possible result for our residents and businesses," Attorney General Maura Healey said in a statement released Tuesday. "Through this agreement, customers will save money on their gas bills while supporting new investments in safety and reliability. Our office will continue to insist that all Massachusetts gas companies provide safe and reliable service at affordable rates."
In April, Berkshire Gas filed a petition with the Department of Public Utilities seeking a rate hike to increase its annual revenues by 4.3 percent. The negotiated settlement agreement was filed with the DPU on Tuesday.
The agreement still needs to be approved by the DPU. Depending on the timing of the DPU's decision, new distribution rates would go into effect either Jan. 1 or Feb. 1.
Berkshire Gas, based in Pittsfield, represents 40,000 residential, commercial and industrial customers in Western and Central Massachusetts.
Under the agreement, Berkshire Gas would also make safety and reliability improvements to its three liquid propane facilities in Greenfield, Pittsfield and North Adams, and to its LNG facility in Whately. These facilities are used by Berkshire Gas as backup for its fuel supply in the winter, when natural gas demand is at its highest.
The $1 million recovery for these capital investments included in the settlement agreement would allow Berkshire Gas to continue to provide reliable service during peak periods, limit its reliance on pipeline natural gas and enhance safety through redundancy.
The agreement also incorporates the flowback of the tax savings Berkshire Gas received as a result of the reduction of the federal corporate tax rate. In December 2017, the Attorney General's Office filed a petition with the DPU, calling on the regulatory agency to ensure that the major tax savings for utilities go to ratepayers, and not to the utilities.
The DPU agreed with the attorney general's position and opened an investigation seeking to lower gas, electricity and water rates after the passage of the new federal tax bill.
In April, the company stated that it filed for a rate increase 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 previously filed for a rate change, in 2001.
A rate adjustment was granted seven years ago, but before 2001, Berkshire Gas had previously filed for a rate increase with the state in 1992.
As the ratepayer advocate for the state, the Attorney General's Office is authorized to intervene in or institute administrative and judicial proceedings on behalf of consumers in any matter involving the rates, charges, prices or tariffs of any gas or electric company doing business in the commonwealth.
Business Editor Tony Dobrowolski can be reached at firstname.lastname@example.org or 413-496-6224.
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