State set to OK sizable gas rate hikes By Bruce Mohl, Globe Staff, 1/31/2001

State regulators are poised to approve a hefty increase in natural gas rates today. The only question is how big it will be.

Citing sharply higher prices for gas, the state's leading utilities all asked regulators to approve major rate hikes starting Jan. 1. When the state Department of Telecommunications and Energy decided to hold hearings on those requests during the month, the utilities responded by hiking the requests.

Keyspan Energy Services, which owns the former Boston Gas, charges customers 68.5 cents a therm. It originally sought an increase to 96.4 cents starting Jan. 1 and then revised that upward to $1.39 starting tomorrow.

Company officials say they need the higher price to recover some $170 million that has been paid out to gas wholesalers but not collected from customers.

The higher charge is also needed to recover estimated gas costs for February and March, the final two months of the winter. Sources say state regulators may trim the utility rate requests by revising downward projections for gas costs during February and March.

The whole debate may mean little to consumers, since they will have to pay the utility costs eventually. Consumers may have to pay more later, if the projections used for February and March prove too low (or receive a rebate if they prove too high).

http://www.boston.com/dailyglobe2/031/business/State_set_to_OK_sizable_gas_rate_hikesP.shtml

-- Martin Thompson (mthom1927@aol.com), January 31, 2001

Answers

State approves gas rate increases

By John McElhenny, Associated Press, 01/31/01

BOSTON -- Natural gas consumers will face bills as much as 35 percent higher next month, after the state on Wednesday approved utility company requests to raise rates.

GAS PRICES

Prices are average monthly bills.

Boston Gas (now part of KeySpan) Before: $172. Now: $232.

Bay State Gas Company Before: $190. Now: $216.

Berkshire Gas Company Before: $163. Now $176.

Blackstone Gas Company Before: $168. Now: $197.

Colonial Gas - Cape (now part of KeySpan) Before: $180. Now: $225.

Colonial Gas - Lowell (now part of KeySpan) Before: $166. Now: $208.

Commonwealth Gas (now part of NSTAR) Before: $165. Now: $214.

Essex Gas (now part of KeySpan) Before: $156. Now: $210.

Fall River Gas Company Increased by $22. Other data unavailable.

Fitchburg Gas and Light Company Before: $156. Now: $186.

North Attleboro Gas Company. Before: $200. Now $230.

Source: Department of Telecommunications and Energy.

The companies say they're struggling to keep up with record-high gas prices on the world market caused by high demand during an abnormally cold winter.

Some said they were disappointed that state regulators refused to allow them to allow rates as high as they requested, and said Wednesday's decision meant consumers would have to pay higher rates down the road.

"These are charges that'll be deferred," said NSTAR spokesman Michael Monahan. "Like any business, we have to be able to recover the cost of providing our product."

NSTAR, which provides gas to 300,000 Massachusetts customers, had requested a 36 percent increase, but the state Department of Telecommunications and Energy granted a 31 percent hike.

The average NSTAR residential customer will see rates rise from $217 to $284 per month, an increase of 31 percent, Monahan said.

The company had requested a 36 percent increase.

Boston Gas consumers will be hit hardest by Wednesday's rate increase. The average Boston Gas consumer will see his monthly bill rise from $172 to $232 -- a 35 percent increase, the highest in the state.

The company had requested an increase to about $286 per month for a typical consumer.

Michael Connors, a spokesman for KeySpan Energy Delivery New England, which includes the former Boston Gas, said that increase was necessary merely to cover the cost of gas on the world market.

"We don't make money on the increase," he said.

In fact, because the rate hike was less than requested, Connors said the company would now have to look at other ways to recover the money.

The chairman of the DTE board, James Connelly, said the board tried to balance interests of consumers against those of private utilities.

"If we deferred all of those costs until next year, consumers would be burdened with additional interest charges," he said in a statement. "Although the requested prices were unprecedented, they are largely driven by increased national and international demand for natural gas."

In most years, Massachusetts gas companies change prices twice -- at the beginning of the peak season in November and at the end, in May -- but wild fluctuations this year forced them to re-evaluate months earlier.

It's the first time that's happened since Massachusetts deregulated its natural gas industry in the early 1980s, said DTE spokesman Rob Wilson.

The gas rate hikes come at a sensitive time for Massachusetts consumers, who are already being hit with higher rates for electricity, home heating oil, and even cable television.

In its Wednesday ruling, the DTE also prohibited gas companies from shutting off service for non-payment before May 1. The date had been March 15.

The DTE also directed gas companies to aggressively promote their energy conservation programs.

http://www.boston.com/news/daily/31/gas_prices.htm

-- Martin Thompson (mthom1927@aol.com), January 31, 2001.