Following a recent earnings report showing Connecticut Natural Gas Corporation over-collected $8 million from Connecticut families and businesses, Attorney General William Tong, Consumer Counsel Claire E. Coleman, Connecticut Industrial Energy Consumers, and the Public Utilities Regulatory Authority Office of Education, Outreach, and Enforcement submitted a joint petition to the Public Utilities Regulatory Authority seeking a new rate hearing to drive down costs for consumers.
It has been five years since CNG’s last rate case before PURA. Per state statute, rate review hearings must be conducted at least every four years.
CNG’s most recent earnings report shows the company has been earning 177 basis points above its authorized return on equity (“ROE”) of 9.3 percent. This was not a billing error—CNG was accurately collecting previously approved rates. Due to a variety of factors that must be thoroughly scrutinized in a rate case, those rates appear well beyond what is necessary to cover their expenses. That 177 basis points translates into more than $8 million in excess payments by ratepayers. Of that, approximately $4 million will be returned to ratepayers to offset bills during the highest use winter months. The remaining excess profit will be distributed to shareholders.
This latest earnings report demonstrates that CNG’s rates may be more than just, reasonable and adequate to provide essential utility services. The joint petition urges PURA to conduct a full rate proceeding to ensure that ratepayers are paying no more than absolutely necessary for that service.
“CNG is profiting off the backs of Connecticut families and businesses. We pay far too much for our utilities as it is, we should not be charged a penny more than needed. CNG needs to come before PURA right away for a full rate hearing so we can scrutinize their books and get these inflated costs under control. Connecticut ratepayers should not be subsidizing CNG shareholders,” said Attorney General Tong.
“CNG is overdue for a full rate review, routinely required by Connecticut statute, and the company’s most recent earnings report shows that consumers paid CNG $8 million more than it needed in order to provide service. When rates fall out of sync with a utility’s actual cost needs, the pocketbooks and quality of life of Connecticut residents can suffer. As the state’s independent ratepayer advocate, we’ve joined our partners to call CNG before PURA for a line by line accounting of the their earnings. Given our current economic situation, families, non-profits and businesses across the state have had to make tough decisions to ensure they live within their means. Filing today’s joint motion is the first step in ensuring CNG does the same,” said Consumer Counsel Coleman.
“Businesses are under enormous pressure to stay competitive in Connecticut with the high cost of utility service. Connecticut Natural Gas Corporation reported an appalling rise in earnings last year, demonstrating that customers are paying far more than necessary for their gas service. This hurts businesses and makes it harder to grow the economy in the company’s service territory. The Connecticut Industrial Energy Consumers is pleased to collaborate with the Attorney General, the Consumer Counsel, and the Authority’s Office of Education, Outreach, and Enforcement to advocate for new gas rates that are just, reasonable, and do not force customers to continue paying extra money every month to fund excessive shareholder profits,” said Jay Goodman, attorney for the Connecticut Industrial Energy Consumers.
CNG serves 184,000 customers in central Connecticut and Greenwich.
