(NECN: Peter Howe, Beverly, Mass.) For 850,000 homeowners and business in eastern Massachusetts, National Grid is the company they pay for natural gas for heating, cooking, and hot-water heaters.

But when National Grid came looking for a $100 million gas-rate increase recently, investigators for Attorney General Martha Coakley found National Grid was trying to get its gas customers to pay for much more.

As first reported by The Boston Herald Wednesday, Grid had tried to roll into its rate base items like an executive's $35,700 tuition bill for his kids from the British School of Boston; $1,600 for framed pictures in U.S. CEO Tom King's office; $4,000 for an executive's trip to president Obama's inauguration; and $1,200 for the expense of shipping a Grid executive's wine collection from the U.K. to the U.S. when he was relocated.

"We determined that at a minimum there was at least $300,000 worth of expenses [that were] clearly not allowable for reimbursement in rate increase,'' Coakley said.

After Coakley blew the whistle, National Grid quickly backed down and withdrew the expenses from what it was asking Massachusetts utility regulators to approve.

In a statement issued Wednesday, National Grid's Deborah Drew said: "National Grid never has, and never would, intentionally include in our cost of service calculations expenses that are inappropriate to recover from our customers ... In instances where we find inappropriate costs that may have been inadvertently included, the company always has been quick to remove these costs from our cost of service. The company is actively reviewing employee expenses currently in all of our rate cases for appropriateness and will make adjustments as warranted, including removing expatriate employee expenses. Our rates case focus on investment in our infrastructure and funding necessary operating expenses such as labor costs and costs for materials and supplies.  Rate cases should include employee expenses that are necessary to support the operation of the utility, such as the cost of travel between the office and meeting with our local regulatory agency."

Governor Deval Patrick declined to wade into the controversy, telling NECN at an event in Fall River, "The attorney general's doing her job, and she does a great job.''

Coakley said in light of the dubious expenses grid was trying to foist on ratepayers, she'll demand state utility regulators run a full audit. "Every single dollar on these bills matters for ratepayers, and this kind of sloppy bookkeeping this kind of excessive rate increases should not be tolerated by the ratepayers,'' Coakley said.