Attorney General Martha Coakley Requests That the Department of Public Utilities Reconsider Portions of its Decoupling Order

FROM THE OFFICE OF THE ATTORNEY GENERAL

August 04, 2008

BOSTON — Attorney General Martha Coakley’s Office today filed a motion with the Massachusetts Department of Public Utilities (DPU) requesting that the DPU reconsider and clarify portions of its July 16 decoupling order. “While our Office believes that decoupling of gas and electric rates has potential to increase energy efficiency if structured and implemented properly, we are concerned that a portion of the DPU’s decoupling plan will allow utilities to needlessly raise rates,” Attorney General Martha Coakley said. “We are asking that the DPU reconsider and clarify portions of its decoupling approach so that ratepayers are not harmed during these volatile economic times.”

The Attorney General’s motion requests that the DPU reconsider a portion of its decoupling plan that allows three natural gas utilities -- Berkshire Gas Company, Bay State Gas Company, and National Grid (Greater Boston natural gas service territory) -- to unilaterally terminate their existing ten year rate plans. These ten year rate plans had been designed to provide customers with certainty in the distribution portion of their rates and provided incentives to utilities to reduce rates. Allowing these three utilities to terminate their rate plans will likely lead to higher rates.

Under the DPU’s July 16 order, gas and electric utilities will over time file rate plans that separate, or decouple, their sales of electricity or gas from the revenues they need to collect in order to maintain the electricity and natural gas distribution system for which they are responsible. In addition, the DPU’s order allows electric utilities to recover revenue lost to energy efficiency measures as an interim step before decoupling. Because allowing utilities to recover lost-based revenues could increase rates, the Attorney General’s motion requests that the DPU undertake a complete review of the effect of allowing this recovery mechanism on a utility by utility basis before allowing it.

“As the decoupling process goes forward, our Office will advocate aggressively on behalf of ratepayers,” noted Coakley. “We look forward to working with all stakeholders to ensure that decoupling does not lead to unnecessary increases in energy rates in these difficult economic times.”