Coming to a compromise of sorts with the attorney general (AG) of Massachusetts, Hampton, NH-based Unitil Corp. said last week that its Massachusetts utility operating subsidiary, Fitchburg Gas and Electric Light Co., and the AG have filed a rate settlement agreement for the company’s gas division with the Massachusetts Department of Telecommunications and Energy (MDTE).

The settlement, which was filed with the MDTE for review and approval on Nov. 29, would replace a request for a gas distribution rate increase that Unitil had been preparing to file and will avoid the significant costs of conducting a general rate case before the MDTE. The settlement calls for the phase-in of gas distribution rate changes with an initial rate increase of $1.2 million as of Feb. 1, 2007, and an additional $1 million increase on Nov. 1, 2007. The company noted that the settlement also includes agreement on several other rate matters and service quality performance measures for the company’s gas division in the areas of safety, customer service and satisfaction.

“The settlement reflects a lot of hard work and good faith negotiations between Unitil and the attorney general’s office, and achieves a reasonable balance between our need for revenues that support our gas operations and investments and our obligation to our customers to provide safe, reliable natural gas service at fair and reasonable rates,” said Unitil CEO Robert G. Schoenberger.

Under the settlement, a natural gas bill for a typical residential heating customer using 150 therms per month will increase from $264.40 to $272.50, or 3.1%, as of Feb. 1, 2007 and an additional 2.5% on Nov. 1, 2007.

Unitil provides electric service in New Hampshire, electric and gas service in Massachusetts and energy services throughout the Northeast for 113,600 customers.

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