Full Title: The Obligation to Serve in Massachusetts: Gas Service and the Energy Transition
Author(s): Justin Gundlach, Amanda Zerbe, Sarah Barth, and Brooks Weinberger
Publisher(s): Institute for Policy Integrity, NYU Law
Publication Date: February 10, 2023
Full Text: Download Resource
Description (excerpt):
In Massachusetts, achieving the state’s decarbonization target in a cost-effective manner will likely require the refusal of new gas service in addition to the termination of existing gas service in certain buildings and its replacement with electric service. The scope of utilities’ legal obligation to serve their customers will be central to those efforts. Local distribution companies (LDCs) must generally continue service to existing customers in their territories unless the costs of providing service would result in a permanent financial loss (except in certain instances of nonpayment). However, the Massachusetts Department of Public Utilities (DPU) might have some discretion to allow termination of service following a hearing. In addition, LDCs may reject new customers in certain circumstances, and may take on new customers only when the incremental costs of expansion do not exceed incremental revenues. DPU has also already acknowledged that gas is a substitutable resource with respect to new customers, which could provide relevant precedent for a similar finding with respect to existing customers as DPU implements policies that shift the role of LDCs in providing energy to customers in Massachusetts. This policy brief describes and contextualizes the statutory provisions, previous DPU orders, and legal cases that relate to Massachusetts’s obligation to serve and that will inform how Massachusetts navigates its gas system transition.