New Haven Register (New Haven, CT)
Blumenthal backs legislation to end natural gas overcharges
U.S. Sen. Richard Blumenthal said Monday he will introduce bipartisan legislation to prevent natural gas pipeline companies from overcharging customers.
If approved and signed into law, the Making Pipelines Accountable to Consumers and Taxpayers Act will result in millions of dollars of refunds to consumers who have been overcharged for their natural gas costs. The loophole that allows for the overcharges to occur exists because the Federal Energy Regulatory Commission regulates rates charged by natural gas pipeline companies, but does not have the ability to order rebates for the pipelines’ customers when they are overcharged.
Interstate natural gas pipeline companies, Blumenthal said, regularly overcharge utility companies, which purchase the fuel to provide to their customers. The costs charged to the natural gas utilities are then passed along to consumers.
Blumenthal described the pipeline companies’ overcharges as “systematic and ceaseless.” He said that a recent American Public Gas Association study found that between 2012 and 2016, U.S. consumers paid $2.5 billion more than they should have.
Current federal law provides natural gas customers no opportunity to recover overcharges, and so the natural gas pipeline companies are able to keep the excess, according to Blumenthal. The proposed legislation would fix this problem by granting FERC the authority to require that pipeline companies reimburse their customers for excessive charges and ensure excessive consumer rates are reduced on a timely basis.
The proposed legislation has the support of Pedro Azagra, chief executive officer of Orange-based Avangrid, the corporate parent of Southern Connecticut Gas and Connecticut Natural Gas. Azagra said the two natural gas utilities pass through what they pay for the natural gas delivered from the pipeline and do not make a profit.
“We believe it’s important for energy consumers to know where their costs come from,” he said.
Chris Riley, a spokesman for Norwich Public Utilities, said the legislation, if approved and signed into law, “has the potential to make a real difference to our 10,000 natural gas customers every month.”
Officials with the Interstate Natural Gas Association of America, a Washington, D.C. trade group of pipeline operators, were not immediately available for comment on the proposed legislation.