Massachusetts Gas Transition Order

In December 2023, the Massachusetts Department of Public Utilities issued an order to move utilities away from natural gas. The regulatory strategy prohibits gas utilities from charging customers for new gas infrastructure if there are viable alternatives, and from using ratepayer money to “promote” natural gas. The order also changes the existing cost recovery process that incentivizes adding new gas customers. Beginning in 2025, gas utilities are also required to submit “Climate Compliance” plans every five years to ensure that they’re sufficiently working to eliminate emissions and electrify.  The DPU recommends amending the existing Performance Based Ratemaking framework to establish incentives and disincentives reflecting the gas utilities’ progress towards compliance with the Climate Act mandates and directs the gas utilities to develop “climate compliance performance metrics” in their next PBR filings. As an initial step on the issue of depreciation, the DPU directed all gas utilities to conduct a forecast of the potential magnitude of stranded investments, and to identify the impacts of accelerated depreciation proposals, as well as potential alternatives to accelerated depreciation.