The Connecticut Department of Public Utility Control on Thursday preliminarily denied the proposed rate increase from natural gas utility Yankee Gas, saying the proposed merger between its parent Northeast Utilities in Hartford and NStar in Boston would result in increased savings.
Berlin-based Yankee Gas originally asked for a 8.5 percent rate increase, and then revised it to 7.5 percent. On Thursday, the DPUC draft decision gave Yankee Gas a rate increase of 0.5 percent. The difference between Yankee Gas’ revised request and the DPUC amount is $63.5 million.
In addition to savings from the NU/NStar merger, DPUC denied the rate increase because of increased sales forecast, current capital market conditions, decreased payroll and reductions to the rate base.
The decision comes a day after DPUC announced it would not formally review the $4.3-billion NU/NStar merger.
Attorney General George Jepsen hailed the DPUC’s rate denial but still insists the agency should have conducted a more thorough review of the customer impact of the NU/NStar merger.
“If the DPUC had decided to do a full regulatory review of this proposed merger, there may have been additional benefits to Connecticut utility customers,” Jepsen said in a statement issued late Thursday.
The exact impact on Yankee’s gas rates will not be known until later this year. Yankee Gas must be file for new rates that match Thursday’s decision from DPUC, and those rates will become effective in late July.
Yankee Gas received late Thursday, June 2, the Department of Public Utility Control (DPUC) draft decision in the company’s rate case. Â We filed the case on January 7 requesting a rate increase of $45.8 million over two years.
Yankee Gas’ current return on equity is 10.1 percent, but that will drop to 8.8 percent if Thursday’s draft decision is adopted.
Yankee Gas President Rod Powell said the company will review the DPUC’s decision and have a written response by June 14
A final DPUC decision is expected June 29.
