DPU cuts gas pipe-replacement caps, pushes utilities toward cheaper repairs and non‑pipeline solutions

The Massachusetts Department of Public Utilities this spring ordered immediate reductions to how much gas utilities can recover under the Gas System Enhancement Program, aiming to slow rapid spending on pipe replacement and push companies to consider lower‑cost repairs and non‑pipeline alternatives.

The order lowers the GSEP revenue cap from 3% of a utility's revenue to 2.5% immediately, directs a glide path to 2% in 2026 and 1.5% in 2027, and eliminated carrying charges on amounts spent above the cap, DPU Chair Jamie Van Nostrand told the Senate Committee on Climate Change and Global Warming.

The DPU said the changes are intended to protect ratepayers and align utility spending with the Commonwealth's clean‑energy mandates. Utilities now must use more rigorous risk prioritization, make greater use of advanced leak‑detection and repair technologies, and formally evaluate non‑pipeline alternatives before replacing mains, the department said.

DPU Chair Jamie Van Nostrand, in testimony, summarized the regulator's findings: "We concluded in the order that the absence of meaningful incentives to control costs was contributing to unnecessary spending and an overreliance on pipe replacement to the exclusion of lower cost alternatives." She added that the pipeline safety division will lead a new risk‑assessment working group and scheduled its first meeting for May 27.

Attorney General Mary Gardner, who participated in the GSEP litigation, told the committee the DPU reforms adopt many of the attorney general's recommendations. "The elimination of carrying charges ... will have a very significant impact on ratepayers in a positive way," Gardner said, adding that further reductions of the GSEP cap toward the statutory minimum would reduce incentives for imprudent spending.

Data presented at the hearing illustrated why regulators intervened. Chair Van Nostrand noted that average capital spending per mile under GSEP rose from about $1.32 million in 2015 to about $3.46 million projected in 2025 while miles remediated grew at under 3% annually. Measured another way, miles replaced per $10 million declined from about 7.59 miles in 2015 to 2.89 miles in 2025.

Dorothy Sevey of Groundwork Data estimated the long‑run cost of GSEP spending could reach roughly $42 billion in constant dollars (about $60 billion nominal), noting the program's multi‑decade payback and downstream effects on bills.

Utility witnesses said they welcomed sharper cost controls but cautioned that non‑pipeline alternatives and neighborhood electrification pilots take time. Nikki Bruno, vice president of clean technologies at Eversource, described the Framingham network geothermal pilot and called customer outreach and tailored education "essential" to adoption. Gerhard Walker, Eversource's director of integrated energy planning, said utilities must coordinate gas and electric planning and that pilots will provide lessons for scaling NPAs.

National Grid's Caroline Hahn said the company filed a targeted electrification demonstration in December 2024 that would seek voluntary conversion of roughly 18 residential customers across segments in Leominster and Winthrop and noted NPAs currently must meet participation thresholds to serve as a decommissioning pathway.

Stakeholders urged faster action and transparency. Mira Fickling (Current Energy Group) and Jocelyn Lee (Conservation Law Foundation) said GSEP as implemented had encouraged broad pipe replacement because accelerated cost recovery let utilities begin recouping investments immediately, and they pressed for public access to the analyses that underlie NPA screening and project prioritization.

Local officials and residents described timing and notification problems that make neighborhood alternatives difficult. Talia Fox, sustainability manager for Arlington, said by the time a GSEP filing lists a project "it is likely too late to realistically implement electrification as an alternative to pipeline replacement." Newton resident John Sloat, who led a Garland Road neighborhood survey, urged earlier disclosure of street segments slated for work so communities can organize NPAs.

The DPU order also established a requirement for more rigorous justification of pipe replacements and signaled continued review of line extension policies and climate compliance plans to align spending with state climate goals. The department and the attorney general said further oversight will continue through reconciliation dockets and the new risk prioritization group.

As the DPU executes the orders, the legislature and stakeholders will watch whether the cap reductions and removal of carrying charges yield lower bills and faster adoption of non‑pipeline alternatives, and whether regulators can accelerate community‑level planning timelines so NPAs can be proposed before pipe replacements are executed.