Massachusetts Attorney General Martha Coakley’s office is opposing a proposed $29.2 million rate increase by Columbia Gas after an investigation revealed that the company is seeking to pass millions in unnecessary costs, including more than $100,000 in corporate jet travel, on to Massachusetts ratepayers.
Bay State Gas Company d/b/a Columbia Gas of Massachusetts, which provides natural gas service to approximately 295,000 customers across Massachusetts, has filed a proposed rate increase of $29.2 million.
In a brief filed with the Department of Public Utilities (DPU), Coakley recommends that the utility company not only be denied the increase, but instead cut its rates by $27.9 million.
“Columbia Gas’ request for a rate increase simply doesn’t pass the ‘common sense test,’” AG Coakley said. “Columbia Gas received a significant rate increase in 2009, and they still have yet to follow through on the upgrades they promised to deliver with those funds. Now they are back seeking to pass more unnecessary costs on to ratepayers. If their executives want to fly on corporate jets, they can do it on their shareholders’ dime, not at the expense of Massachusetts ratepayers.”
Columbia Gas has received a significant rate increase from the DPU –$19 million in 2009 – as well as other favorable terms that the company claimed it needed to safely replace leak prone pipes.
Despite those increases, the AG’s investigation revealed that the company’s frequency of pipeline replacement was actually slower after the DPU approved the rate hike.
Coakley’s office also claims that Columbia Gas knowingly failed to disclose to the DPU that it had received permission from the Internal Revenue Service to change its tax accounting, which resulted in a $19 million tax refund. As a result, the 2009 rates set by the DPU were higher than warranted, costing customers $2.2 million per year in overcharges since 2009 – totaling $6.6 million today.
According to the AG’s investigation, Columbia Gas also failed to control other costs, such as charging ratepayers for “luxurious indulgences,” such as the lease of a Hawker 800XP executive jet and the chartering of other jets, a lavish expense that cost ratepayers an average $6,354 per passenger per flight.
Coakley requests in the brief that Columbia Gas limit recovery of airplane travel, and that ratepayers only be required to reimburse coach service for airplane flights.