Berkshire Gas Company would have its proposed rate hike cut in more than half by a negotiated settlement with the state Attorney General’s Office.
But while that could be great news for existing customers, a negotiated provision to improve the company’s Whately and Greenfield facilities won’t end its 4-year-old moratorium on expanding service in five Franklin County and four Hampshire County towns.
The settlement agreement, filed with the Department of Public Utilities Tuesday, resolves a request by Berkshire Gas in May to increase its net distribution revenue by $3.1 million.
The agreement, which would reduce the proposed increase to about $1.4 million, requires DPU approval, with new distribution rates taking effect on Jan. 1 or Feb. 1.The settlement also prevents Berkshire from imposing any other rate increases before November 2021.
Under the agreement announced by AG Maura Healey, Berkshire would make safety and reliability improvements to its three liquid propane facilities in Greenfield, Pittsfield and North Adams and at its liquefied natural gas facility in Whately.
These existing facilities are used by Berkshire 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, the attorney general’s office says, “will allow Berkshire to continue to provide reliable service during peak periods, limit its reliance on pipeline natural gas, and enhance safety through redundancy.”
Berkshire has been studying either building a new LNG storage facility somewhere in its Franklin County service area, as well as an expansion of its 16-mile distribution system between Greenfield and Tennessee Gas Pipeline interconnection in Southwick, after rejecting half a dozen other options as part of its Forecast and Supply Plan for 2016-17 through 2020-21.
It reiterated for more than 300 prospective customers on a waiting list in Greenfield, Montague, Deerfield, Whately and Sunderland that both options would be too costly to proceed, so the moratorium “will have to continue indefinitely due to the limitations on the capacity of the delivery system.”
Company spokesman Chris Farrell said Thursday that the improvements agreed to in the new settlement with the AG’s Office “are not a solution to the moratorium; however, they will aid us in meeting our primary obligation to provide safe and reliable service to our existing customers at a competitive price. “
He added that the Whately and Greenfield improvements “will add redundancy and reinforcement for the purpose of serving existing customers …. While the company remains committed to evaluating options for lifting the moratorium on an ongoing basis, it has, at the same time, committed substantial resources to reinforce and add redundancy to the mechanical LNG and Propane Air systems that currently augment our pipeline natural gas supplies during the winter months.”
The moratorium also affects Amherst, Hadley and Hatfield.
Healey said, “As the ratepayer advocate for the state, it is our job to ensure we get the best possible result for our residents and businesses. 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.”
The agreement also incorporates tax savings Berkshire received as a result of the reduction of the federal corporate tax rate. That resulted from the AG’s petitioning the DPU last December to ensure that utility tax savings go to ratepayers, and not to gas, electricity, and water utility owners.