Lawmakers hike assessment on utilities 50%

Money will be used to fund DPU budget, which is increasing 54%


THOUGH LAWMAKER LEFT a handful of proposed taxes on the cutting room floor when they compromised on a budget, the fiscal year 2020 spending plan being reviewed by Gov. Charlie Baker includes a 50 percent increase in the annual assessment imposed upon gas and electric utility companies.

The assessment of a percentage of each utility company’s Massachusetts revenue is meant to be a reimbursement of the cost of overseeing and regulating the gas and electric industries. The budget awaiting Baker’s action would raise the maximum rate of that assessment from 0.2 percent of revenue to 0.3 percent of revenue.

Sen. Michael Barrett, who filed the assessment increase as a budget amendment, said the idea stemmed from September’s natural gas explosions and fires in the Merrimack Valley, and the subsequent closer look at the Department of Public Utilities.

“A number of us are worried about the number of pipeline safety inspectors that have been on the job recently. The administration has actually been taking steps in the right direction in terms of training more of them — but that is dependent to some extent on an expanded funding source,” said Barrett, who co-chairs the Joint Committee on Telecommunications, Utilities and Energy.

Barrett added that the assessment is targeted for an increase “to heighten the ceiling, increase the cap, so that they could pay for more inspectors.”

In December, former Energy and Environment Secretary Matt Beaton told lawmakers that DPU pipeline safety inspectors conducted 1,177 inspections in 2017, up from 880 in 2016. He said that, since 2014, DPU has averaged between 10 and 12 public utility engineers, some of whom are certified as inspectors.

As of December, Beaton said DPU had 11 public utility engineers — six certified as inspectors, five more en route to being trained, and two additional jobs posted. He said that would bring the total number of public utility engineers to 14, “the highest in anyone’s recent memory.”

The 50 percent increase in the maximum allowable assessment rate corresponds with a roughly 54 percent increase in the funding appropriated by the Legislature for administration of the DPU. The line item for the agency’s general operations is set to increase from $10.36 million in fiscal 2019 to just under $16 million in the fiscal 2020 budget awaiting the governor’s action.

The annual assessment is currently levied at a rate of up to 0.2 percent of the revenue that each company earns in Massachusetts and is meant to be “sufficient to reimburse the commonwealth for funds appropriated by the general court for the operation and general administration of the department,” minus funds for DPU’s Transportation Division and the cost of benefits for DPU employees.

“This is a significant increase, this represents a 50 percent increase in this particular charge. Of course, my committee is going to be extremely interested to see that the money is well spent. We’ve got an oversight responsibility here that we will exercise,” Barrett said. “But I trust the new DPU leadership to use the additional authority well. The public wants to see a safer natural gas system, so that’s the bottom line.”

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Some of the state’s largest utility companies — National Grid and Unitil — said they had no comment on the assessment rate hike and another major player, Eversource, did not respond to a request for comment.

In March, the DPU levied a $13,098,935 assessment on the state’s utilities, which reported having generated more than $8 billion in revenue in Massachusetts in 2017.

Massachusetts became the last state in the country to pass a budget through its Legislature and get it to the governor’s desk. The Legislature approved the $43.1 billion fiscal year 2020 budget on Monday and Baker has until next Friday, Aug. 2, to act on it.