GREENFIELD — As Berkshire Gas plans to increase its rates by roughly 23%, or $54 per month for the average customer, members of the public shared their views with the Department of Public Utilities Thursday night at Greenfield Middle School.
Serving roughly 40,000 customers in 20 western Massachusetts municipalities, including Deerfield, Greenfield, Hadley, Hatfield, Montague, Sunderland, Whately and Amherst, Berkshire Gas is petitioning to increase its natural gas-based distribution rates to generate approximately $28 million in revenue that will support a variety of changes, such as improvements to aging infrastructure and hiring more employees. If approved by the DPU, the rate increase is expected to take effect Oct. 1.
The company also proposes implementing a performance-based rating plan, or PDR, which would allow Berkshire Gas to adjust its base distribution rates on an annual basis through a mathematical formula using a revenue cap benchmark, according to DPU Hearing Officer Lauren Morris, who kicked off the meeting alongside DPU Commissioner Staci Rubin.
“The DPU is going to do everything that we can to bring down costs for customers; we take all rate matters seriously. We plan to thoroughly review all information provided about the company’s rate increase, including your comments tonight,” Rubin said, addressing residents. “Over the next few months, the DPU staff will review the company’s testimony. We’ll look at detailed cost data, we will cross-examine witnesses and hold evidential hearings and review public comments that we received, both orally and in writing. … We will scrutinize all information and, only after the commission reviews all evidence in the case, will we issue a decision.”
In an emailed statement following Thursday’s hearing, Gov. Maura Healey voiced her opposition to the proposed rate increase.
“Berkshire Gas’ proposed rate hike is unaffordable, and I oppose it,” Healey said. “This proposed increase in utility bills could not come at a worse time for families and businesses in western Mass. It’s why we took $180 million off electric bills and pushed the utilities to provide immediate relief to gas customers this winter.
“My administration is working to bring down costs through an all-of-the-above approach with more wind, solar, storage, gas and nuclear,” she continued. “Our energy affordability legislation would get costs off bills, increase accountability and promote more energy so our residents aren’t hit with bills they can’t afford.”
Berkshire Gas President Charlotte Ancel explained during Thursday’s hearing that the proposed rate increase comes in the wake of a “very serious gas safety issue” that arose in the Merrimack Valley in 2018.
Fires and gas explosions on Sept. 13, 2018 affected residents across Lawrence, North Andover and Andover, causing damage so significant that then-Gov. Charlie Baker declared a state of emergency. After more than a year of investigations, the National Safety Transportation Board found that the destruction resulted from inadequate management and poor oversight that led to a cast iron pipe being improperly abandoned, and the over-pressurization of the area’s natural gas distribution system, CNN reported.
Ancel explained that the rate increase would be used to make needed safety updates to its system and hire an additional six employees, all based in western Massachusetts.
“We are, quite frankly, a customer-focused company. Our objectives are to serve our customers with safe, reliable gas service that is as cost-effective as possible. Our rates are the lowest in Massachusetts of any gas utility,” Ancel said. “I will tell you, on behalf of Berkshire Gas, if we could never increase our rates, we would gladly do that. We do, however, have to balance our cost-effective objective with also making sure that our service to all of you is safe and reliable.”
Referencing a moratorium the company invoked in 2015 preventing new customers in Amherst, Hadley, Hatfield and Sunderland, which preceded a similar moratorium on new service in Deerfield, Greenfield, Montague and Whately in 2014, resident Anthony Fyden commented that he believes Berkshire Gas customers were “victims of poor policy decisions” that have restricted the company’s revenue for years.
Greenfield resident Skyler Lambert, addressing the DPU and Berkshire Gas in public comment, explained that while he is appreciative of the company addressing unsafe infrastructure and hiring more employees, he does not believe the projected revenue increases expected from the rate hike are proportionate to the cost of these safety improvements.
“I don’t read anything positive in the proposal. It’s very concerning that, not only for this year, but for future years, that the rates have the ability to increase. I do appreciate that you acknowledge, as the commission, the aging infrastructure. Also, I understand that natural gas is very expensive to distribute to New England,” Lambert said. “One thing that wasn’t mentioned at all, which is all over this piece of paper, is revenue. Eighteen percent increase in total revenue. … As a customer, it speaks volumes. The language matters here, and the one positive that I would say is the additional hiring of employees. I think that’s a nice thing, but I don’t think that that’s worth $28 million in additional revenues. It’s concerning that the company is controlling the revenue portion for the next five years.”
In an interview following Thursday’s hearing, Ancel said the company is appreciative of the public’s input on the rate increases, adding that Berkshire Gas shares these concerns over affordability, but also remains committed to eradicating methane emissions from its pipes.
Responding to the concerns over the company’s projected revenue increases, Chris Farrell, a Berkshire Gas spokesperson, named aggregate inflation as one of the largest cost-increasing factors.
“One of the biggest challenges we have, and certainly we’re very sensitive to the comments made — we completely understand it, because we’re homeowners and we pay the bills, too — is aggregate inflation,” Farrell said. “Aggregate inflation, since our last rate case, has been roughly 15%. … The DPU mandates that we invest literally an additional tens of millions of dollars annually for safety. We have no problem with that. We certainly think it’s prudent, and if the DPU wants us to do it, we’re going to do it, but those are costs that we have to recover, and it’s as frustrating for us as it is for the ratepayer, but it’s in the interest of safety, regulatory compliance and keeping the company whole.”