Welcome to Based Rates!
Commentary on Utility Regulation from The Future of Heat Initiative
As the Policy Director at the Future of Heat Initiative (FoHI), I’m pleased to welcome you to the inaugural post of Based Rates. Our team at FoHI will be using this platform to share news about our work, and to offer observations, analysis, and occasionally blunt commentary on regulatory developments. Mainly, we will focus on how to better regulate gas distribution utilities in a world where customers are using less gas, and paying more for it.
I’m a regulatory wonk with about 45 years of experience in energy regulation — I’m a former utility commission staffer, private practice attorney representing utilities, head of an environmental NGO, academic, and most recently Chair of the Massachusetts Department of Public Utilities (DPU). Before Governor Maura Healey appointed me to the DPU, I was a Professor and Director of the Center for Energy and Sustainable Development at West Virginia University (WVU) College of Law. During my 12 years at WVU, I wrote The Coal Trap: How West Virginia Was Left Behind in the Clean Energy Revolution (Cambridge University Press, 2022), which describes how West Virginia politicians aligned themselves with the interests of the coal industry to the substantial detriment of the citizens and economy of the Mountain State. Having taken on Big Coal in West Virginia, I know what it looks like when an industry’s financial interests diverge from the public’s, and I’m seeing the same pattern play out with gas utilities driving up energy bills across the country.
The Gas Trap
Of all the issues I faced as Chair of the Massachusetts DPU, the most challenging – and impactful in terms of maintaining energy affordability for customers – was how to regulate gas utilities in a future where customers are using less gas, driven by energy efficiency improvements and advancements in electric technologies. During my service as Chair, the DPU issued a series of orders designed to mitigate the rate impacts arising from customers reducing their reliance on the gas system through, among other things, replacing their natural gas furnaces with electric heat pumps. Meanwhile, the gas distribution companies were spending hundreds of millions of dollars each year rebuilding and maintaining a gas network that is larger than necessary to meet future needs. In December 2023, we ended “business as usual” ratemaking for gas pipeline replacement projects, requiring utilities to consider lower-cost alternatives such as targeted repairs and non-pipeline solutions in which they provide similar service at lower cost.
In April 2025, we issued orders reducing how much gas companies could charge customers each year for replacing old pipes, and instituted a more rigorous risk-evaluation process to ensure that the existing system remains safe. Later in 2025, we announced our intention, subject to further proceedings, to end line extension allowances — a longstanding practice that forces existing customers to subsidize new gas connections.
A National Problem
These issues are hardly limited to Massachusetts, and are even more acute in other states across the country where spending on gas infrastructure is up dramatically, resulting in gas delivery rates that have nearly doubled since 2011, increasing at more than twice the rate of inflation.
Ten years ago, about two-thirds of a typical gas bill paid for the gas itself. Today, less than a third does; roughly 70 percent of the bill pays for infrastructure, profits, and taxes. That explains why utility bills can still go up even though customers use less gas or the fuel price falls: They are paying for an aging system, not the energy.
Given FoHI’s mission to address the energy bill increases driven by gas industry infrastructure spending, it was a logical place for me to land following my service at the DPU. FoHI is a small, elite group of really smart people working on solutions to very tough issues that will make a real difference in keeping energy affordable nationwide. I feel fortunate to be part of this team, and I look forward to using the Based Rates platform to share our work and our thoughts on developments in the gas transition currently underway across the U.S.
Jamie Van Nostrand
Policy Director