Mass PUC Approves Reductions to Winter Gas Supply Rates—After RI Rates Increased Nearly 10%
Thursday, February 02, 2023
While RI Energy requested a 15% hike in RI in 2022, MA was able to reduce rates, as announced this week. PHOTO: GoLocal
The move comes in stark contrast to Rhode Island, where RI energy requested a 15% increase for residential natural gas last fall; the RI PUC approved a 9.6% increase for natural gas in October 2022.
“Rhode Island’s Gas Cost Recovery (GCR) filing is made once a year usually in late August or early September, which sets the gas supply rates for the year ahead based on a forecast of gas costs and customer usage. The GCR is subject to review and approval by our regulator, the Rhode Island Public Utilities Commission. Just like in other states, the gas we procure on behalf of our customers is passed along to them without markup. If actual gas costs and customer usage significantly differ from that forecast we may consider an adjustment clause filing to update the rates," said Ted Kresse with RI Energy.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"We monitor this situation continuously, but at this point an additional filing has not been warranted," he added. "More importantly, any difference in supply costs that materializes over the course of twelve months is reconciled in the next year’s GCR filing. This ensures that customers ultimately benefit from any lower natural gas prices experienced from the time rates were set the previous year.”
About MA Rates
According to Massachusetts' DPU, beginning on February 1, 2023, customers served by The Berkshire Gas Company, Liberty Utilities, Fitchburg Gas and Electric Light Company d/b/a Unitil, Boston Gas Company d/b/a National Grid, and NSTAR Gas Company d/b/a Eversource Energy can expect lower winter gas supply rates, which will be reflected in the utility bills that customers receive in March.
The decreases, which are attributable to changes in the market-based price of natural gas over the course of the winter period, result in a lower gas supply rate, said MA DPU.
“Our administration is focused on reducing costs for Massachusetts residents and businesses,” said MA Governor Maura Healey. “We are exploring every possible tool to ease burdens, from reductions in energy costs, fuel assistance, nutritional support, and more. With these reduced energy prices, small businesses can grow, and more families will be able to put food on the table and roofs over their heads.”
“These reductions in winter gas supply rates will offer some much-needed relief to gas ratepayers this winter,” said Department of Public Utilities Acting Chair Cecile Fraser. “We continue to direct the utilities to work with the families and businesses across the Commonwealth through energy efficiency and fuel assistance programs to help alleviate the burdens of energy costs.”
Under federal law, natural gas is sold in a competitive market. The Massachusetts gas distribution companies are required to purchase gas on their customers’ behalf at the market price and pass that cost on to their customers without profit to the companies.
The DPU requires all gas distribution companies to revise their gas supply rates, known as the cost of gas adjustment factor, or “GAF”, whenever the companies will materially over- or under-collect costs from customers. Due to declining natural gas prices in the competitive market, the companies will decrease their GAF for gas consumed between February 1, 2023, and April 30, 2023. Each gas distribution company’s gas supply rates change at least every November 1 and May 1. Customers can shop for their own electric supplier through the DPU’s Energy Switch website: www.energyswitchma.gov.
According to NBC Boston last fall, National Grid had announced that its natural gas rates were expected to rise on November 1.
"They have a pending proposal with the state Department of Public Utilities that would result in the monthly bill for an average Boston Gas residential heating customer using 115 therms per month of $278, an increase of $50, or 22%, compared to last winter's rates," reported NBC Boston.
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