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Regulator Orders Immediate Reduction In Total Customer Bills, Directs Utilities To File Proposals In Default Service & Distribution Proceeding
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The Massachusetts DPU has ordered all of the state's investor-owned natural gas distribution companies to file revised
reconciling factors that will result in no less than a 5% reduction in residential and
residential low-income average bills for the remainder of the peak season (March and April
2025).
The DPU ordered that such "proposals" for revised reconciling factors shall be filed by the LDCs in their combined cost of gas adjustment factor (e.g. default service) and local
distribution adjustment factor docket (the same docket address both default service and delivery reconciliations and interim adjustments). Proposals shall be filed by February 24, 2025,
to be effective on March 1, 2025
The DPU did not specifically direct whether LDCs should propose reductions in their bypassable gas supply cost, their delivery rates, or both (as noted, the dockets in which the LDCs are to file the proposed rate cuts cover both the bypassable cost of gas as well as distribution rates)
However, while the DPU did cite higher supply costs in its direction to the LDCs (noted below), distribution rates (which are two or three times higher than the cost of gas in some cases) have been cited in media reports as the primary driver of large gas bills for Massachusetts customers this winter
The DPU said, "The combination of increased supply costs, the recovery of unusually high programmatic
costs through delivery charges, and a cold winter has driven customer bills to unsustainable
levels. These circumstances warrant immediate measures to provide relief to consumers."
Uncollected costs due to the cuts will be deferred, and the DPU notably ordered that any deferred costs will be collected through the local distribution adjustment factor
during the off-peak season (May through October 2025).
Furthermore, in addition to the ordered immediate cuts, the DPU directed the gas LDCs, as well as any electric utility affiliated with a gas LDC (e.g. Nstar, National Grid, FG&E), "to take all
appropriate and reasonable actions to mitigate the financial effects of winter energy bills..."
While the DPU specifically directed a review of several cost drivers, such as ratepayer spending on state-mandated programs (such as rebates for electrification and other "environmental" programs), and also offered other specific direction (such as increased promotion of budget billing and energy assistance), nothing in the DPU's direction that utilities shall take, "all
appropriate and reasonable actions," excluded mitigation of supply costs as policy to be considered
The DPU's immediate action follows a letter from Massachusetts Gov. Maura Healey which noted, among other things, that the DPU in recent years had acted to make electricity supply rates more stable after spikes in wholesale electric prices. As such, even to the extent that the immediate rate cuts ordered by the DPU are not made to the gas supply cost, supply cost issues may yet be addressed in the future
In response to the DPU's action, Massachusetts Attorney General Andrea Joy Campbell wrote to the DPU with additional proposals for immediate rate relief. Among other recommendations, Campbell again urged the DPU to end individual residential electricity choice.
Campbell said that ending individual residential electric choice, "will provide relief to countless households who currently pay too much for electric supply."
In the Feb. 21 letter to the DPU, the AG did not specifically recommend ending individual residential natural gas choice. Historically, residential gas shopping in Massachusetts has been about 1% of residential customers, or about 15,000 customers statewide
Dockets
D.P.U. 24-PGAF-GRID
D.P.U. 24-PGAF-NSTAR
D.P.U. 24-PGAF-EGMA
D.P.U. 24-PGAF-BERK
D.P.U. 24-PGAF-LIB
D.P.U. 24-PGAF-FGE
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Regulator Directs "All Appropriate And Reasonable Actions" To Mitigate Winter Bills, Does Not Exclude Supply Rate Cuts In Such Direction
February 21, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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