Deal reached with Eversource on natural gas hike

Connecticut’s Office of Consumer Counsel of has reached a settlement with Eversource Energy that reduces the distribution rate increase the utility company was seeking from its natural gas customers.

Consumer Counsel Elin Swanson Katz announced the settlement, which reduces the proposed rate increases in each of three years of the proposed plan. The settlement agreement still must be approved by Connecticut’s Public Utilities Regulatory Authority.

Eversource officials had proposed a 9.2 percent increase in natural gas distribution rates next year, followed by a 3.7 percent hike the following year and with an additional 2.9 percent added on in the final year. Under the terms of the settlement, next year’s distribution rate increase will be just 0.3 percent, followed by a 2.9 percent hike the following year and 2.3 percent in final year.

“When Yankee Gas filed its Application proposing a $49 million distribution rate increase in just the first year of a three-year proposal ... we and many other stakeholders were very concerned,” Katz said. “If granted, Yankee Gas customers would have seen a dramatic increase in their bills, creating a potential ‘rate shock’ and a financial hardship for Connecticut consumers. I am thus very pleased that we were able to negotiate a proposed settlement that reduces that first year request from $49 million to $1.4 million.”

Mitch Gross, an Eversource spokesman, said though the company made several concessions in order to reach the agreement, officials view it as “a fair settlement that reduces the increase for customers while allowing for continued investments in our system to provide safe and reliable service to our customers.”

“It’s important to note that this settlement reflects savings from the change in the federal tax law that are already included in our electric rates and that we’re pleased to pass along to gas customers,” Gross said. “We filed the settlement with PURA today and it will now undergo a full review process, which will include public comment hearings where customers and community leaders have the opportunity to express their views.”

The settlement calls for an overall reduction of $55.8 million from the amount Eversource had originally sought from its customer, according to Katz.

“While we of course don’t celebrate any rate increase, I am incredibly proud of the work done by my team,” she said. “If approved by PURA, this marginal rate increase would meet Yankee’s needs to provide safe and reliable service to its customers, but minimizes the impact on consumers’ distribution bills.”

Some increase in rates is necessitated by law to pay for the substantial investments that Eversource has made, and will continue to make, in new gas pipelines and other system improvements designed to increase the reliability and resiliency of its natural gas infrastructure, she said. That includes more than $500 million of investment already spent, but not included in rates.

Katz said it has been seven years since Eversource’s last rate increase. The company serves approximately 232,000 gas customers in 73 communities in in its Connecticut service territory.