The General Laws of the Commonwealth of Massachusetts are hereby amended as follows:

SECTION 1. Chapter 164 of the General Laws, as appearing in the 2014 Official Edition, is hereby amended by adding the following section:

Section 147. (a) As used in this Section, the following words shall have the following meanings:

“Gas” - natural gas and any of its products, components or derivatives and methane, whether produced by, or gathered from or collected as a result of exploration and production by well, mining or otherwise, hydraulic fracturing, biomass gasification reactors, biogas reactors, anaerobic digestion, methane emissions from landfills and liquid natural gas and whether mixed with propane air or not or with synthetic natural gas or not.

“Hydraulic fracturing” - the process of pumping a fluid into or under the surface of the ground in order to create or develop or enhance the flow through fractures in rock for the purpose of the production or recovery of oil or gas.

"Liquefied natural gas " - a natural gas  that has been changed into a liquid by cooling the temperature at atmospheric pressure to approximately 260°F.

“Local Distribution Company” – includes a municipal distribution company, and is referred to as an LDC.

“Local retail outlets” – Distributors of gas at retail to retail customers for individual household use.

"Natural gas " - a type of gas   which originates in the ground and is predominantly methane.

"Propane air" - a type of  gas   produced by those facilities which add commercial grade propane to air for mixture with natural  gas .

“Provider” – anyone that purchases, acquires, transmits, barters, forfeits, exchanges, transports, stores, processes, compresses or decompresses, distributes, sells or conveys gas for resale or reuse and any Public Utility. A Provider may use one or more system types.

“Public Utility” – a gas or electric company as defined in section one of chapter one hundred and sixty four, or any municipal corporation which owns or may acquire municipal lighting plants as referred to in section two of said chapter one hundred and sixty four or any person, firm, association, or private corporation which owns or operates works or a distribution plant for the manufacture and sale or distribution and sale of gas for heating and illuminating purposes, or of electricity, within the Commonwealth as referred to in section two of said chapter one hundred and sixty four or any domestic electric utility  or foreign   electric utility  as defined in section one of chapter one hundred and sixty four A.

"Synthetic natural  gas  " - a type of  gas  which is made by a facility which produces a gaseous fuel from the manufacture, conversion or reforming of liquid or solid hydrocarbons.

“System type” – any one of a gas distribution system, gas transmission or transportation system, gas storage facility whether in liquefied or other state, gas production, gathering or handling system. and a Public Utility.

Unaccounted-for-gas (UFG) —The difference between the total gas available from all sources that is acquired by a system type and the total gas accounted for as sales, net interchange and company use. This difference includes leakage or loss by other means, discrepancies due to measuring or monitoring inaccuracies, variations of temperatures or pressures, or both, and other variants .

(b) Calculation of UFG.

(1) When possible, UFG must be measured, computed and reported by system type.

(2) UFG for a system type equals Gas Received less Gas Delivered less Adjustments.

(3) Percent of UFG equals UFG divided by Gas Received times 100

(4) Gas received, gas delivered, and adjustments must represent actual gas quantities. Measuring and monitoring equipment that meets current industry standards applicable in Massachusetts must be installed. Estimates shall be treated as UFG unless clearly identified, have supporting justification, assumptions and calculations and can be determined to be at least as accurate as measured results. All records of acquisition by purchase or otherwise, sales and internal usage must be made available and have been kept in the usual course of business.

(5) All lost and unaccounted for gas shall be presumed to be lost gas unless the portion represented by unaccounted for gas, including but not limited to losses to company used gas, liquids extraction, and meter errors due to inaccurate calibration or temperature and pressure fluctuations, is proven by a preponderance of the evidence in a given ratemaking proceeding.

(6) A Provider shall be responsible for the UFG of each other Provider that is a source of gas within the state that is not subject to ratemaking and the gas received for measuring UFG shall be the gas received within the state by that Provider that it not subject to rate making.

(c) The cost of UFG in excess of the maximum allowable and all expenses for decreasing UFG down to the maximum allowable shall be disallowed for ratemaking purposes.

(1) The maximum allowable loss is as shown in the following table.

Maximum Allowable Loss as a Percent of UFG per System Type

Year/ Distribution/ Transmission/ Storage/ Public utility/ Other

1/ 1.00%/ 0.50%/ 0.25%/ 0.25%/ 0.25%

2/ 0.750%/ 0.25%/ 0.10%/ 0.10%/ 0.10%

3/ 0.50%/ 0.10%/ 0.05%/ 0.05%/ 0.05%

4/ 0.25%/ 0.05%/ to/ to/ to

5/ 0.10%/ to

6/ 0.00%/ 0.00%/ 0.00%/ 0.00%/ 0.00%

(2) The calculation of the percentage of lost and unaccounted for gas shall be based on an annual period. Notwithstanding the choice of test year for other aspects of ratemaking, and unless a more appropriate period can be demonstrated by a preponderance of the evidence in a given ratemaking proceeding, the annual period ends June 30, and is the most recent such period for which data are available.

(3) Local retail outlets shall use best available technology and practices for preventing leakage.

SECTION 2. Section 1 shall take effect on January 1, 2017.