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The Massachusetts DPU issued an order establishing revised requirements for gas utilities filing gas special contracts for review. 

Among other things, the DPU: (1) requires that the utility demonstrate: (i) “that the customer has an economically viable alternative to taking service from the LDC’s distribution system under tariff rates”; and (ii) “that the negotiated special contract rate exceeds the LDC’s marginal cost to provide the service to the customer consistent with the marginal cost study approved” in its most recent distribution rate case; (2) maintains the requirement that utilities include as part of any special contract filing: (i) “a decarbonization strategy developed by or in consultation with the special contract customer”; and (ii) “a special contract customer attestation or showing that the proposed special contract avoids hindering regulatory efforts to electrify and contributes to greenhouse gas emissions reductions”; (3) said that: (i) it “retains dual-fuel capability as a justification for gas special contracts”; and (ii) “will not direct the LDCs to conduct audits of their currently effective special contracts”; and (4) “directs an informational filing regarding currently effective special contracts to provide information regarding auto-renewed contracts.”

As background, at the request of the Attorney General (AG), the Massachusetts DPU opened an investigation to review and revise the standard of review and the filing requirements for gas special contracts entered into by utilities. 

The AG questioned: (1) whether the alternative fuel sources used by special contract customers as a justification for negotiating off-tariff rates are still competitive with tariff rates for natural gas service; (2) whether utilities take adequate measures to confirm that their legacy special contract customers are still able to meet their energy needs using their alternative fuel; and (3) whether special contracts allow a select set of commercial and industrial customers to avoid Energy Efficiency Program surcharges and the Maximum Daily Contract Quantity demand structure.

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(DPU Opened An Investigation To Review And Revise The Standard Of Review And The Filing Requirements For Gas Special Contracts Entered Into By Utilities.)