AG Coakley opposes proposed rate hike

Massachusetts Attorney General Martha Coakley announced her opposition today to a proposed rate hike by Bay State Gas Co. on the grounds that the company's request does not meet the legal standards for seeking an increase.

Bay State Gas, which provides retail natural gas service to about 285,000 Massachusetts customers, has asked the Massachusetts Department of Public Utilities, or DPU, to approve its request for an increase by May 1; if granted, the increase could cause customers' bills to rise by 5 percent, Coakley's office said.

According to Coakley's office, Bay State Gas contends that an increase is needed because its customers have significantly and unexpectedly reduced their usage following price increases caused by Hurricane Katrina.

Coakley argues that a request for a rate increase should include detailed information about a company's costs and revenues to support its claim that an increase is justified; in Coakley's view, Bay State Gas's rate request does not meet that standard, and because the application provides insufficient information, DPU should reject it.

Coakley's office said it twice filed briefs with the DPU last month urging the department to turn down Bay State Gas's rate-increase request, and today, Coakley expressed her opposition to the proposed rate increase in a press release.

Bay State Gas is a subsidiary of NiSource Inc., a public-utility holding company headquartered in Indiana.
(By Chris Reidy, Globe staff)