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Utility Proposes To Defer Some Default Service Commodity Costs
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In response to a Massachusetts DPU directive to cut residential bills by 5% during the peak winter season (story here), Liberty Utilities in Massachusetts has proposed deferring reconciliations of its residential gas supply cost that would otherwise be incorporated into its bypassable GAF at this time
Liberty Utilities has, for its Blackstone service area, proposed to defer 60 percent of the projected end-of-period peak period commodity costs, for the Blackstone area, until the next peak period
Under normal operation of the gas supply reconciliation process, Liberty Utilities would have raised the bypassable Blackstone Peak Gas Adjustment Factor (GAF) to $1.0863 per therm from the current charge of $0.5390 per therm
Under the deferral described above, the Blackstone bypassable GAF is proposed to increase to only $0.7579 per therm, effective March 1, 2025
Liberty Utilities has proposed, for its Fall River and North Attleboro service area, to defer 25 percent of the projected end-of-period peak period commodity costs, for the Fall River and North Attleboro service area, until the next peak period
Under normal operation of the gas supply reconciliation process, Liberty Utilities would have raised the Fall River and North Attleboro bypassable Peak Gas Adjustment Factor (GAF) to $0.8938 per therm from the current charge of $0.6273 per therm
Under the deferral described above, the Fall River & North Attleboro GAF is proposed to increase to only $0.8272 per therm, effective March 1, 2025
As previously reported, the DPU had stated that deferred costs will be collected through the local distribution adjustment factor during the off-peak season (May through October 2025). It was unclear if the DPU intended such nonbypassable collection to apply to deferred gas supply costs in addition to deferred distribution charges. Liberty Utilities' proposed deferrals are based on previously filed potential mitigation solutions under which it is understood that the GAF deferral would have been recovered in the peak GAF period next year, not through the local distribution adjustment factor. Liberty Utilities was not explicit in its updated proposal whether the deferred costs would remain bypassable as under its original proposal
None of the other LDCs in Massachusetts proposed any change in the commodity rate or deferral of commodity costs as a means to achieve the DPU's directed 5% cut in residential bills. Such other LDCs (including National Grid and Nstar/Eversource) proposed cuts to distribution rates or nonbypassable public program charges (energy efficiency, etc)
Additionally, as previously reported, the DPU, in addition to the 5% cuts, had directed the LDCs affiliated with electric utilities, "to take all appropriate and reasonable actions to mitigate the financial effects of winter energy bills..."
No LDC in response to such broader direction specifically broached the issue of supply cost mitigation or other supply-related changes, with the LDCs' responses focused on customer outreach and assistance programs. However, as noted last week, the DPU's conversation on affordability is only beginning, and supply cost issues may be raised as the DPU progresses in its consideration
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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February 25, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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