Mass Attorney General Asks State Utility Department To Freeze Gas Rate Increase Due To COVID-19

The following is a press release from the Massachusetts Attorney General’s office, submitted to SOURCE media.

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BOSTON – Recognizing the financial hardship many Massachusetts families are facing as a result of the COVID-19 pandemic, Attorney General Maura Healey is calling on the Department of Public Utilities (DPU) to delay any increases in the rates gas customers pay to cover the cost companies incur for pipeline replacement projects for at least three months.

“This pandemic has caused financial struggles and record unemployment numbers –Massachusetts families can’t afford any additional costs right now,” AG Healey said. “In this difficult and uncertain time for all of us, we’re calling on the DPU to help gas customers by delaying these surcharges.”

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  In a filing made with the DPU today, the AG’s Office contends that the extraordinary circumstances surrounding the state’s response to the public health crisis and the unprecedented economic impacts caused by the pandemic require the DPU to impose a delay of customer surcharges to ensure reasonable access to gas service for Massachusetts customers.

The AG’s Office further argues that due to the pandemic, gas companies are unlikely to conduct a significant amount of pipe replacement over the year and customers should not be charged for work that is not going to happen.

According to the filing, as of March 30, there are more than 5,700 confirmed cases of COVID-19 in the state and more than 56 deaths attributed to the virus. There were nearly 150,000 unemployment claims filed with the state Department of Unemployment Assistance last week, a level that the state has not seen in more than four decades.

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“Thousands of customers across the Commonwealth have seen their lives upended and their financial security devastated by the economic shutdown necessitated to stem the pandemic.  Thousands have been furloughed from work or face the dismal prospects of ensuing layoffs in the days and weeks ahead as business, commercial and financial transactions seize up,” the office’s filing reads. “The first day of every month brings new financial struggles to meet mortgage and rent bills, posing substantial hardships for the Commonwealth’s many newly unemployed workers and business owners whose retail establishments have been ordered closed.”

  Each year, the state’s gas companies provide the DPU with a plan outlining the mileage, location and cost of the pipeline replacement projects they anticipate doing over the next year.

If the DPU approves the company’s plan, known as its Gas System Enhancement Program (GSEP), the company begins charging customers a rate increase, or surcharge, on May 1.

At the end of the year, the DPU reconciles the amount customers paid under the GSEP with the amount of work that was actually conducted. If the DPU approves today’s filing from the AG’s Office, the state’s gas customers will be spared from having to pay the May 1 rate increase during the COVID-19 crisis.

The AG’s Office’s filing argues that the DPU has the authority to suspend these rate increases and has already taken similar steps to address the economic impact the pandemic is having on ratepayers, including prohibiting utilities from suspending service to customers for non-payment. The DPU has also prevented utilities from threatening to disconnect services if customers can’t pay their bills.

The AG’s Office points to similar actions taken in other states, including New York, where the state’s Public Service Commission has delayed rate increases for National Grid’s gas and electric operations for three-months.

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The AG’s Office also argues in its filing that such a delay will not harm the companies because regardless the companies will be made whole for any reasonable work they do complete at the end of the year.

By statute, the AG’s Office of Ratepayer Advocacy represents the interest of ratepayers in proceedings before the DPU. 

AG Healey’s Energy and Telecommunications Division works to ensure Massachusetts businesses and residents have access to reliable, safe and affordable gas and electricity.

This matter was handled by Assistant Attorneys General Don Boecke, Ashley Gagnon, Elizabeth Mahony, and Margaret Sullivan.