WELLESLEY HILLS, Mass. - The Massachusetts Oilheat Council (MOC) has helped cut efforts by KeySpan to fund a multimillion dollar marketing program that gives away free gas heating systems and offers heating contractor incentives in order to convert thousands of oil heated homes in Massachusetts.

On Oct. 31, just one day before the start of winter gas heating rates in Massachusetts, the Department of Telecommunications and Energy (DTE) denied about one half of KeySpan's $11.5 million request to fund the conversion program and a contractor incentive program. The $11.5 million was part of an overall rate hike request by KeySpan of $69 million. In a unanimous decision still being studied by MOC, it appears the DTE rejected $41 million of that request, including $5.6 million for oil-to-gas conversions. The DTE will allow KeySpan to hike its overall residential rates to its nearly 600,000 Boston Gas customers this winter by 9.3 percent, for a total of about $28 million.

Back in April, MOC and the Massachusetts Alliance for Fair Competition were granted intervention status by the DTE in the KeySpan case. Together with the state attorney general, MOC and the alliance argued that the $11.5 million yielded no benefit to KeySpan's Boston Gas ratepayers. They also argued that the program was extremely damaging to the oil heat industry and small-business owners, and an unsound energy policy in the face of rising natural gas prices.